My wife and I are retired. In 2025 I would like to sell some stocks but pay minimum income tax. Our
My wife and I are retired. In 2025 I would like to sell some stocks but pay minimum income tax. Our SS and pension income is around $50K. Is there a maximum income bracket that would be beneficial for us not to exceed?
Best Answer
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Hi Snowbird2,
In 2025, the capital gains brackets for married filing joint are:
0%: $0 - 96,700
15%: $96,701 - 600,050
20%: $600,051+
I'd therefore recommend staying in the 0% bracket for capital gains tax which you can adjust upward by the standard deduction for next year ($30,000 for married filing joint or if you're over 65, $34,000 ini 2025). Any stock sales that would push your income above $212,000 next year will also affect IRMAA. If you convert enough to bring you into the 15% bracket, I'd recommend staying under the $250,000 threshold as you'll then be affected by the NIIT on anything over $250,000.In summary if Married Filing Joint, here are income caps I'd recommend considering:
126,700: Maintains 0% capital gains bracket (96,700 + 30,000 standard deduction)
130,700: same as above but applies higher standard deduction if you're both over 65 ($2k less if only one of you is over 65)
Over $212,000, you're now potentially affecting IRMAA and over $250,000 you're now adding in the net investment income tax.
Answers
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Thank you
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Does taxable income figure into the capital gain, if there is any? (In other words, is the $130,700 capital gain tier limit reduced if there is taxable income?)
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Capital gains are stacked on income so your capital gains bracket is determined such as: income + capital gains - standard deduction = income considered for determing gains bracket. Effectively, the 130,700 would be reduced for capital gains purposes by any income you receive in that tax year.
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Is my Social Security (SS) taxed as ordinary income? (I am 66 yrs old and received my first SS check in February 2024 and my wife is 65, but she continues to work full-time.)
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Hi GaryMN,
Yes, taxable social security is taxed as ordinary income. However, only up to 85% of your social security benefit can be taxed. Often only 0-50% is taxed. See this link to help you figure out how much of your SS is taxable.
