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 $50,000 in earned income and no short-term capital gains, you would fill your brackets with your $50,000 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 |
$50,000 |
|
$10,000 |
Not taxed |
| 15% |
$63,000 to $551,350 |
$0 |
|
|
|
| 20% |
$551,350 or more |
$0 |
|
|
|
|
|
$50,000 |
|
$10,000 |
$0 |
If you have $50,000 of taxable income, you could have $13,000 in gains that would not be taxed. If you have $10,000 in capital gains, your income plus your capital gains falls below $63,000 so you wouldn’t owe any capital gains taxes. You could have an additional $13,000 in capital gains without incurring any tax. Any capital gains above that, would be taxed at 15%.
Next Question
What U.S. state do you currently reside in?
