What are the 2025 long-term capital gains tax rates?

The 2025 long-term capital gains tax rates are 0%, 15%, and 20%. The 0% rate applies to income up to $47,025 for single filers and $94,050 for married filing jointly. The 15% rate applies to income from $47,026 to $518,900 for single filers and $94,051 to $583,750 for MFJ. The 20% rate applies to income over $518,900 for single filers and over $583,750 for MFJ. An additional 3.8% Net Investment Income Tax may also apply.

What is the difference between short-term and long-term capital gains?

Short-term capital gains apply to assets held for one year or less and are taxed at your ordinary income tax rates (10% to 37%). Long-term capital gains apply to assets held for more than one year and are taxed at preferential rates of 0%, 15%, or 20% depending on your taxable income. This difference means holding an asset for at least one year and one day can significantly reduce your tax bill.

How is the Net Investment Income Tax calculated?

The Net Investment Income Tax (NIIT) is a 3.8% surtax that applies to the lesser of your net investment income or the amount by which your modified adjusted gross income (MAGI) exceeds $200,000 for single filers and $250,000 for married couples filing jointly. Net investment income includes capital gains, dividends, interest, rental income, and passive business income.

Can I offset capital gains with capital losses?

Yes, you can offset capital gains with capital losses through a strategy called tax-loss harvesting. Short-term losses first offset short-term gains, and long-term losses first offset long-term gains. If total losses exceed total gains, you can deduct up to $3,000 ($1,500 if married filing separately) against ordinary income per year. Remaining losses carry forward indefinitely to future tax years.

What is the holding period for long-term capital gains?

To qualify for long-term capital gains rates, you must hold the asset for more than one year — specifically, at least one year and one day. The holding period begins the day after you acquire the asset and ends on the day you sell it. Assets held for one year or less are considered short-term and taxed at ordinary income rates.

Are qualified dividends taxed as capital gains?

Yes, qualified dividends are taxed at the same preferential long-term capital gains rates (0%, 15%, or 20%) rather than ordinary income rates. To qualify, dividends must be paid by a US corporation or qualified foreign corporation and held for more than 60 days during the 121-day period surrounding the ex-dividend date. Non-qualified dividends are taxed as ordinary income.

How are capital gains taxed at the state level?

Most states tax capital gains as ordinary income using the same rates and brackets that apply to wages and other income. Nine states have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Some states offer special treatment for certain types of capital gains, such as reduced rates for qualified small business stock.

What is the 0% capital gains rate?

The 0% capital gains rate means that taxpayers in the lowest income brackets pay no federal tax on their long-term capital gains. For 2025, single filers with taxable income up to $47,025 and married couples filing jointly with income up to $94,050 qualify for the 0% rate. This makes tax-loss harvesting and careful timing of asset sales especially valuable for lower-income taxpayers.

Income Tax Calculator 2025 — Free Federal Estimator

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How Your Federal Income Tax Is Calculated

The U.S. uses a progressive tax system with seven brackets. You subtract the standard deduction from gross income to get taxable income, then apply the rate for each bracket to only the income within it. The result is your federal income tax, minus any credits you claim.

Rate	Single	Married Filing Jointly
10%	$0 – $11,925	$0 – $23,850
12%	$11,925 – $48,475	$23,850 – $96,950
22%	$48,475 – $103,350	$96,950 – $206,700
24%	$103,350 – $197,300	$206,700 – $394,600
32%	$197,300 – $250,525	$394,600 – $501,050
35%	$250,525 – $626,350	$501,050 – $751,600
37%	Over $626,350	Over $751,600

The standard deduction for 2025 is $15,000 for single filers and $30,000 for married couples filing jointly. This tool uses the standard deduction automatically — itemized deductions may reduce your tax further if they exceed these amounts.

Disclaimer: This is an estimate using 2025 federal brackets and standard deduction. It excludes self-employment tax, itemized deductions, and state taxes. Consult a professional for your situation.

Income Tax Calculator 2025

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