The capital gains tax rate in 2024 depends on your taxable income for individual filers, with different rates for long-term capital gains.
Understanding 2024 Long-Term Capital Gains Tax Rates
Long-term capital gains are profits from the sale of assets held for more than one year. These gains are typically taxed at lower rates than ordinary income to encourage long-term investments. The specific tax rate you pay is determined by your total taxable income, which includes your ordinary income and any capital gains.
Here are the 2024 long-term capital gains tax rates for individual filers:
| Taxable Income (Individual Filers) | Long-Term Capital Gains Tax Rate |
|---|---|
| $47,025 or below | 0% |
| $47,026 to $518,900 | 15% |
| Above $518,900 | 20% |
Key Considerations
- Income Thresholds: These income brackets are for taxable income, which is your gross income minus any deductions. It's crucial to calculate your total taxable income accurately to determine the applicable capital gains tax rate.
- Short-Term Capital Gains: It's important to note that capital gains from assets held for one year or less (short-term capital gains) are taxed at your ordinary income tax rates, not these special long-term rates.
- Specific Circumstances: Certain types of capital gains, such as those from collectibles or qualified small business stock, may be subject to different rules or rates. Additionally, higher-income taxpayers may also be subject to the Net Investment Income Tax (NIIT).
For more detailed information on capital gains and investment taxation, you can consult reliable financial resources such as the IRS website or reputable financial news outlets like Bankrate.
