How to calculate virginia adjusted gross income: When filing your Virginia state taxes, one of the most important figures you’ll need is your Virginia Adjusted Gross Income (VA AGI). This amount serves as the starting point for determining your state tax liability.
In this guide, we’ll break down how to calculate your Virginia AGI in simple, human-optimized steps—ensuring accuracy while minimizing confusion.
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How to calculate virginia adjusted gross income
Virginia AGI is based on your federal Adjusted Gross Income (AGI) but includes certain modifications (additions and subtractions) specific to Virginia tax laws.
Key Differences Between Federal AGI and Virginia AGI
- Federal AGI: Your total taxable income after federal deductions (e.g., IRA contributions, student loan interest).
- Virginia AGI: Starts with federal AGI but adjusts for Virginia-specific additions (income taxed by Virginia but not federally) and subtractions (income taxed federally but not by Virginia).
Step 1: Start with Your Federal AGI
Your federal AGI can be found on:
- Form 1040 (Line 11) for most taxpayers
- Form 1040-SR (Line 11) for seniors
- Form 1040-NR (Line 11) for non-residents
This is your baseline for calculating Virginia AGI.
Step 2: Apply Virginia-Specific Additions
How to calculate virginia adjusted gross income: Virginia requires you to add back certain income or deductions that were excluded from federal AGI but are taxable in Virginia.
Common Virginia Additions:
- Tax-Exempt Interest from Out-of-State Bonds
- If you earned interest from municipal bonds outside Virginia, add it back.
- Example: $1,000 from a New York municipal bond → +$1,000
- Federal Income Tax Deduction
- Virginia does not allow a deduction for federal taxes paid.
- If you deducted federal taxes on your federal return (e.g., as a business expense), add it back.
- Depreciation Differences (For Businesses)
- If Virginia requires slower depreciation than the federal government, add the difference.
- Certain Retirement Contributions
- Some retirement plan contributions deductible on federal returns may not be allowed in Virginia.
- Other Additions (See Virginia Tax Bulletin)
- Lottery winnings from other states
- Certain business expense deductions
Step 3: Apply Virginia-Specific Subtractions
Virginia allows subtractions for income that was included in federal AGI but is not taxable in Virginia.
Common Virginia Subtractions:
- Social Security & Railroad Retirement Benefits
- If you’re 65+, up to $12,000 per person may be subtracted.
- Military Pay (For Active Duty Servicemembers)
- Combat pay excluded federally may still need adjustment.
- Virginia State Income Tax Refund (If Previously Deducted)
- If you deducted state taxes on last year’s federal return, subtract this year’s refund.
- College Savings Contributions (529 Plans)
- Up to $4,000 per account (or $2,000 if filing separately).
- Other Subtractions
- Federal tax-exempt income from Virginia bonds
- Certain disability payments
Step 4: Calculate Final Virginia AGI
Now, plug your numbers into this formula:
Virginia AGI = Federal AGI + Virginia Additions – Virginia Subtractions
Example Calculation:
| Description | Amount |
|---|---|
| Federal AGI | $60,000 |
| Add: Out-of-State Bond Interest | +$1,000 |
| Subtract: Social Security Benefits | –$12,000 |
| Virginia AGI | $49,000 |
Step 5: Use Virginia AGI to Determine Tax Liability
Once you have your Virginia AGI:
- Apply the Virginia tax rates (2% to 5.75% based on income).
- Subtract any credits (e.g., low-income, child tax credits).
Final Tips for Accuracy
✔ Double-check Virginia tax bulletins for updates.
✔ Use tax software (TurboTax, H&R Block) for automated calculations.
✔ Consult a tax professional if you have complex income sources.
Conclusion
How to calculate virginia adjusted gross income: Calculating your Virginia Adjusted Gross Income requires adjusting your federal AGI with state-specific additions and subtractions. By following these steps, you can ensure an accurate tax filing and potentially reduce your tax liability.
For official forms and updates, visit the Virginia Department of Taxation.
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