Long term capital gains and qualified dividends are taxed at a lower tax rate than ordinary income. Under current tax law, they can be taxed at a 0%, 15%, or 20% rate, depending on the amount of your taxable income and your filing status.
Per the IRS, for 2024 the maximum capital gains tax rates are:
| FILING STATUS |
0% RATE |
15% RATE |
20% RATE |
| Source: Internal Revenue Service |
| Single |
Up to $47,025 |
$47,026 – $518,900 |
Over $518,900 |
| Married filing jointly |
Up to $94,050 |
$94,051 – $583,750 |
Over $583,750 |
| Married filing separately |
Up to $47,025 |
$47,026 – $291,850 |
Over $291,850 |
| Head of household |
Up to $63,000 |
$63,001 – $551,350 |
Over $551,350 |
Additionally, depending on your income, you may be subject to the Net Investment Income Tax (NIIT). The NIIT is a 3.8% additional tax that applies if your modified adjusted gross income is over $250,000 if married filing jointly or qualifying surviving spouse, over $125,000 if married filing separately, or over $200,000 if filing single or head of household.
This additional tax is assessed on the lesser of the net investment income or the income over the above listed thresholds.
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