Modified adjusted gross income is the amount taxpayers use to determine whether they qualify for certain tax deductions, including the deductibility of contributions to 401(k), traditional and Roth IRAs, and interest on student loans.MAGI is also used to determine eligibility for certain tax benefits and government-subsidized programs. Common examples include the child tax credit, adoption credit, the American Opportunity and Lifetime Learning credits for education expenses, the health insurance premium tax credit, and Medicaid coverage based on income.In general, having lower MAGI means having a better chance of qualifying for tax benefits and programs. There are different definitions and calculations of MAGI depending on what it's used for, so it's important to apply the correct definition of MAGI to the particular benefit claimed. In addition, the cap on MAGI for certain tax deductions can change each year.