Adjusted Gross Income

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ADJUSTED GROSS INCOME

The term used forincome taxpurposes to describe gross income less certain allowable deductions such as trade and business deductions, moving expenses, alimonypaid, and penalties for premature withdrawals from term savings accounts, in order to determine a person's taxable income.

The rules for computing adjusted gross income for federal income tax may differ from the rules in a state that imposes a state income tax.