6 | Depending on your state, you could owe state & Federal capital gains taxes
If you have $10,000 in capital gains, depending on your state, you could owe state capital gains taxes in addition to Federal. The capital gains tax rate applies only to profits from the sale of assets held for more than a year. and have $100,000 in earned income and no short-term capital gains, you would fill your brackets with your $100,000 in taxable income before allocating your $10,000 in long-term capital gains.
| Tax Rate |
For taxable income |
Taxable income
already in tier |
|
Capital gains in tier |
Capital gains taxes |
| 0% |
Up to $63,000 |
$63,000 |
|
|
|
| 15% |
$63,000 to $551,350 |
$37,000 |
|
$10,000 @15% |
$1,500 |
| 20% |
$551,350 or more |
$0 |
|
|
|
|
|
$100,000 |
|
$10,000 |
$1,500 |
If you have $100,000 of taxable income, $63,000 fills up the first tier, which leaves $37,000 in the 15% tier. All of your $10,000 in capital gains would be taxed at 15%, costing you $1,500. Your “marginal” Federal capital gains tax rate is 15%, because you would have to pay 15% on your next $451,350 in capital gains.
Next Question
What U.S. state do you currently reside in?
