How is a capital gains sale taxed if I'm in the 0 % bracket

[Deleted User]
[Deleted User] Posts: 0 Newcomer
edited December 10 in Live Q/A Event

SSA and other income is under the 0% capital gains bracket

Best Answer

  • TRobinson
    TRobinson FreeTaxUSA Agent Posts: 6
    Answer ✓

    The capital gains amount will be taken into consideration with the taxable income. An example is if your taxable income without the capital gains is $40,000 but with your capital gains the taxable income is $46,000 then the $1,375 that is over the 44,625 for single and married filing separately limit for 0% capital gains tax will be taxed at the next bracket of 15%

Answers

  • MikeCat
    MikeCat Member Posts: 1 Newcomer

    Depends on the capital gains, I think, because that can bump you out of the 0% income bracket.

    But I think that is a "graduated" tax, where you will pay 0% up to AGI of $44,625 (single filer), then if your capital gains pushes you into the 15% bracket, you will only have to pay 15% on the amount OVER 44,625. Can someone verify that for me?

    Thanks much,
    Michael

  • TRobinson
    TRobinson FreeTaxUSA Agent Posts: 6

    Hello

    A capital gains rate of 0% applies if your taxable income is less than or equal to $44,625 for single and married filing separately, $89,250 for married filing jointly and qualifying surviving spouse; and $59,750 for head of household.

    If your income falls into this bracket then the income from capital gains will not be taxed whereas the the rest of your taxable income will be taxed as normal.

    The following link from the IRS has bit more information about the breakdown of capital gains

    tax.https://www.irs.gov/taxtopics/tc409

  • Henry
    Henry FreeTaxUSA Agent Posts: 97

    Hi Kj1, you may not pay any capital gains tax if your total taxable income is below a certain threshold. Here is a link to the IRS website where you can view the current capital gains rates.

    It says there that a capital gains rate of 0% applies if your taxable income is less than or equal to:

    • $44,625 for single and married filing separately;
    • $89,250 for married filing jointly and qualifying surviving spouse; and
    • $59,750 for head of household.

  • [Deleted User]
    [Deleted User] Posts: 0 Newcomer

    Does the amount of gain fit into the taxable income bracket? Or is it separate