What Is the Difference Between AGI and MAGI for U.S. Expats?

Adjusted Gross Income (AGI) is your total income minus specific above-the-line deductions like the self-employment tax deduction, IRA contributions, and student loan interest. Modified Adjusted Gross Income (MAGI) starts with AGI and adds back certain excluded or deducted items. For expats, the most important add-back is the Foreign Earned Income Exclusion, which is excluded from AGI but added back for most MAGI calculations (IRS: Modified Adjusted Gross Income).

Why the FEIE add-back matters for expats:

• Roth IRA eligibility: MAGI phase-outs for Roth contributions start at $150,000 for singles and $236,000 for MFJ (2025). If your AGI shows $0 after the FEIE but your MAGI adds back $130,000 in excluded income, you may still be within the phase-out range.
• Child Tax Credit: the CTC phase-out uses MAGI, meaning FEIE-excluded income counts toward the $200,000 single / $400,000 MFJ threshold
• Premium Tax Credit (ACA): MAGI determines eligibility for health insurance subsidies; FEIE-excluded income is added back
• Net Investment Income Tax (NIIT): the 3.8% surtax kicks in when MAGI exceeds $200,000 single / $250,000 MFJ; FEIE income is added back

Common MAGI add-backs beyond FEIE:

• Foreign housing exclusion amounts
• Tax-exempt interest (for Social Security taxation and ACA)
• Student loan interest deduction
• IRA contribution deduction (for IRA deductibility calculations)

The trap: Many expats assume that excluding $130,000 under the FEIE puts their income at $0 for all purposes. It does for AGI and income tax, but MAGI-based thresholds still see the full income.

For more, see our FEIE vs Foreign Tax Credit guide.