What are the long-term capital gains tax rates?
Long-term gains (assets held over one year) are taxed at 0%, 15%, or 20% depending on your total taxable income. For the current year a single filer pays 0% up to about $47,025 of taxable income, 15% up to about $518,900, and 20% above that. These rates are much lower than ordinary income rates.
What is the difference between short-term and long-term gains?
Short-term gains (assets held one year or less) are taxed as ordinary income at your regular bracket, up to 37%. Long-term gains (held more than one year) get the preferential 0/15/20% rates. Holding an asset past the one-year mark can substantially reduce your tax.
What is the net investment income tax (NIIT)?
The NIIT is an additional 3.8% tax on net investment income (including capital gains) for taxpayers whose modified adjusted gross income exceeds $200,000 single or $250,000 married filing jointly. It applies on top of regular capital gains tax.
Can I deduct capital losses?
Yes. Capital losses first offset capital gains. If losses exceed gains, you can deduct up to $3,000 of net capital loss against ordinary income each year, and carry the remainder forward to future years indefinitely.