Long-Term Capital Gains Tax Rates for 2023-2024

Important Updates for Tax Filers

Reduced Rates and Graduated Thresholds

In a significant tax update, the long-term capital gains tax rates have been revised for the 2023 and 2024 tax years. These rates, applicable to assets held for more than a year, now range from 0% to 20%, depending on the income of the filer.

The 0% rate applies to long-term capital gains up to a certain income threshold. For 2023, this threshold is $80,800 for single filers and $161,600 for married couples filing jointly. Beyond this threshold, the long-term capital gains tax rate becomes 15%.

For higher-income taxpayers, a third tier of taxation comes into effect. For taxable income exceeding certain thresholds, the long-term capital gains tax rate increases to 20%. These income thresholds are $539,900 for single filers and $647,850 for married couples filing jointly for 2023.

It's important for taxpayers to be aware of these updated tax rates and thresholds to ensure accurate tax planning and reporting. Failure to do so may result in underpayment or penalties.