Tax-Free Capital Gains: A Tax Break for the Middle Class
Taxpayers in the two lowest brackets owe no tax at all on long-term gains and qualified dividends.
For most people, long-term capital gains are taxed at 15%. Same goes for qualified dividends. The wealthiest investors are taxed at 20%.
But investors in the two lowest income tax brackets pay no tax at all on capital gains and dividends. That can be a nice break for retirees, who are not taxed on some or all of their Social Security benefits. The unemployed, who may have had to tap their investments to make ends meet, can also benefit.
To take advantage of the zero-percent capital-gains rate for 2015, taxable income can't exceed $37,450 if you are single; $50,200 if you are a single head of household with dependents; or $74,900 if you are married filing jointly. Note that this is taxable income. That's what's left after you subtract personal exemptions, as well as your itemized deductions or standard deduction, from your adjusted gross income.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
There are plenty of other ways to save when you file your return. Check out eight more tax breaks for the middle class.
-
My Top 10 Stock Picks for 2026Each year, we ask an expert to pick 10 stocks that have the potential to beat the market over the next 12 months. Here are his choices for 2026.
-
Special Report: The Future of American PoliticsThe Kiplinger Letter The Political Trends and Challenges that Will Define the Next Decade
-
We're Still Bullish on StocksWe're still bullish on stocks for 2026, but now is the time for investors to pull in their horns and dial down risk.
-
Retirees in These 7 States Could Pay Less Property Taxes Next YearState Taxes Retirement property tax bills could be up to 65% cheaper for some older adults in 2026. Do you qualify?
-
Estate Tax Quiz: Can You Pass the Test on the 40% Federal Rate?Quiz How well do you know the new 2026 IRS rules for wealth transfer and the specific tax brackets that affect your heirs? Let's find out!
-
5 Types of Gifts the IRS Won’t Tax: Even If They’re BigGift Tax Several categories of gifts don’t count toward annual gift tax limits. Here's what you need to know.
-
The 'Scrooge' Strategy: How to Turn Your Old Junk Into a Tax DeductionTax Deductions We break down the IRS rules for non-cash charitable contributions. Plus, here's a handy checklist before you donate to charity this year.
-
Tax Refund Alert: House GOP Predicts 'Average' $1,000 Payouts in 2026Tax Refunds Here's how the IRS tax refund outlook for 2026 is changing and what steps you can take now to prepare.
-
New IRS Changes to FSA Contribution Limits for 2026: What to KnowHealth Care Flexible Spending Accounts have tax advantages worth looking into, especially in light of new IRS changes.
-
Is a New $25,000 Health Care Tax Deduction Coming in 2026?Tax Policy A proposal from GOP Sen. Josh Hawley adds to the chatter about health care affordability.
-
3 Ways High-Income Earners Can Maximize Their Charitable Donations in 2025Tax Deductions New charitable giving tax rules will soon lower your deduction for donations to charity — here’s what you should do now.
