The calculation of Adjusted Gross Income (AGI) includes dividend income. Your total income from all sources, including wages, dividends, capital gains, and other earnings, is known as AGI, with the exception of specific adjustments like retirement contributions or student loan interest.

If qualified dividends satisfy IRS criteria, they are taxed at preferential capital gains rates, while ordinary dividends are taxed at standard income tax rates. The contributions of both types are part of AGI and can affect eligibility for tax credits and deductions.

If adjusted gross income (AGI) is negative, donations will not be deducted. When adjusted gross income is positive in the future year, nondeducted donations may be utilized.