Holding onto stock shares for fear of a big tax bill? Think again. If you can manage your income right, you may not have to pay any taxes at all when you sell.
Could your capital gains bill be lower than you think? Most people are surprised to learn that instead of a uniform rate, there are actually three federal long-term capital gains tax rates:
- 20% if you’re in the top marginal tax bracket of 39.6% (e.g., those filing jointly with incomes of $470,701 and above, or singles making $418,401 and above)
- 15% if you’re in all other tax brackets except the bottom two (e.g., those with taxable incomes of $75,901 to $470,700 for those filing jointly or $37,951 to $418,400 for singles)
- 0% if you’re in the lowest two tax brackets (e.g., taxable income under $75,900 for those filing jointly or $37,950 for singles)
Michael Yoder | Kiplinger