Adjusted Gross Income is not calculated on a W2. Adjusted Gross Income AGIis calculated on an individualu2019s income tax return.Gross Income is the total of all selfemployed business profits farm profitswages retirement income and all other nonexcluded Income. From this you areallowed to deduct certain things. These deductions are referred to asadjustments or if you are very old abovetheline deductions. Thesedeductions are typically related to taxdeferrals. Deductions like IRAcontributions HSA contributions and Health Insurance payments for selfemployed taxpayers are all allowed as adjustments to Gross Income.Other deductions such as Charitable Contributions and Mortgage Interest arecalled Itemized Deductions or BelowtheLine Deductions.