First, capital gains are included in the calculation of AGI, so depending on the amount you may still pay tax on your capital gains even if you have no other income.
Your gross income includes everything you earned from: Alimony, Business income, Capital gains, Dividends, Interest, Farm income, Rental and royalty income, Retirement income, Tips, Wages.
Your adjusted gross income is equal to your gross income, less certain tax-deductible expenses.
The tax rate for long-term gains depends on your income and filing status.
Long-term, capital gains tax brackets as of 2019 are:
Tax Rate:
Single Taxpayers
Married Filing Jointly
Heads of Household
0%
$0 - $39,375
$0 - $78,750
$0 - $52,570
15%
$39,376 - $434,550
$78,751 - $488,850
$52,571 - $461,700
20%
$434,551 or more
$488,851 or more
$461,701 or more
Qualified dividends are taxed at the long-term capital gains tax rate.
Regular dividends are classified as either qualified or ordinary, each with different tax implications that impact an investor's net return. The tax rate on qualified dividends for investors that have ordinary income taxed at 10% or 12% is 0%. Those that pay income tax rates greater than 12% and up to 35% (for ordinary incomes of up to $425,800) have a 15% tax rate on qualified dividends. The tax rate on qualified dividends is capped at 20%, which is for individuals in the 35% or 37% tax brackets and with ordinary income greater than $425,800. These tax rates on long-term capital gains are current through the 2019 calendar year. Note also that there is an additional 3.8% Net Investment Income Tax (NIIT) which is applicable for individuals with modified adjusted gross income exceeding $200,000 or $250,000 for married taxpayers who are filing their taxes jointly.
Answers are correct to the best of my ability but do not constitute legal or tax advice. **If this post is helpful please click on "thumbs up"**
