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New Rules on Capital Gains

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

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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