New Rules on Capital Gains

Rates didn’t change, but they’re pegged to your income instead of your tax bracket.

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What are the long-term capital gains rates under the new tax law? - C.C., Williamsburg, Va.

The rates didn’t change, but they’re pegged to your income instead of your tax bracket. For 2018, you’ll pay 0% on long-term capital gains (investments held longer than a year) if your taxable income is below $38,600 for single filers, $51,700 for heads of household or $77,200 for joint filers. You’ll pay the 15% rate for taxable income up to $425,800 for singles, $452,400 for heads of household or $479,000 for joint filers. Above those income levels, the rate is 20%. You may owe state taxes, too, and high earners may also have a 3.8% net investment income tax, says Mark Luscombe of Wolters Kluwer Tax & Accounting.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.