Tax and other gifts of the MAGI
Tuesday, December 24, 2019
Merry Christmas Eve to all who celebrate this late December holiday.
I must confess that, despite my grandmother's and, to a slightly lesser degree, my mother's best efforts, I love Christmas for mainly secular reasons.
I love the lights, especially the gaudy, multicolored ones that glow and flash. I love the ornaments, particularly the kitschy ones that remind me of special times, events and people.
And, of course, there are the presents. Over the years I've enjoyed more than my fair share of delightfully packaged goodies.
But I've also come to realize that I like searching for, finding and giving gifts more than getting them.
That's why one part of the religious connection of Christmas, the journey of the wise men to greet the Christ child, has always appealed to me.
The original Christmas gift givers: These travelers are credited by many as the inspiration for our practice of giving gifts on (or near, if you open presents today) Dec. 25.
According to the Biblical telling, they followed an unusually bright star that led them to Baby Jesus.
Upon their arrival 12 days after his birth, they presented him with gold, frankincense and myrrh. That's why Jan. 6, the Epiphany, is celebrated by many religious denominations as a feast day.
The deliverers of these gifts are known by many names, most commonly the Three Wise Men, although that number is just presumed based on the trio of gifts mentioned in the Bible, or the Magi.
The traversing trio also is celebrated in one of my favorite carols, "We Three Kings," although the Bible also never expressly says they were kings.
The origination of holiday gifting also plays a big role in one of my favorite short stories, O. Henry's "The Gift of the Magi."
You can read it yourself, or listen to a reading of it from a few years back by NPR's Audie Cornish.
In case you've never heard or read O. Henry's classic tale, I won't spoil his trademark twist that captures the Christmas spirit. But I will quote his assessment of giving and getting:
"Of all who give and receive gifts, such as they are the most wise. Everywhere they are the wise ones. They are the magi."
Tax MAGI, too: With my love of Christmas gifts and giving and the story and song of the Three Wise Men, it's no surprise that when I started focusing on taxes decades ago, I was delighted to discover the acronym MAGI.
No, the abbreviation has nothing to do with the wise men of the Christian story.
But it is about what it usually takes to buy gifts: money.
When it comes to tax terms, money typically is referred to as income.
And MAGI is specifically an earner's modified adjusted gross income.
Here's the official definition of it from the ol' blog's tax glossary:
Modified adjusted gross income (MAGI) -- This figure is calculated by starting with your adjusted gross income (AGI) and then adding back certain amounts you previously subtracted to get to you AGI. The precise deductions you have to reconsider usually depend on the tax benefit that uses your MAGI. For example, it's your MAGI, not your AGI, that determines whether you can open or contribute to a Roth IRA. MAGI also affects eligibility for many educational and child-related tax breaks, as well as taxability of Social Security benefits. In each case, how MAGI is figured might be different, so read the instructions carefully.
Happy holidays: I know it's not much, but please accept this holiday-themed Christmas Eve post as my tiny tax-related gift to you.
I hope it helps a bit if you encounter MAGI in the filing of your return or the calculating of a tax benefit.
I also home you enjoy the associated Magi tidbits, stories and song.
Most of all, regardless of what or how you celebrate this time of year, here's to peace and goodwill to all, during this season and year-round!
The hubby and I have our own nativity scene. (See Mum and Mam-ma, I'm not a total heathen!)
It's got, of course, a Texas flavor, with a Mexican folk-art armadillo joining the more traditional animals that shared the barn with Baby Jesus, Mary, Joseph, the Angel and the Three Wise Men bearing gifts.
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