- The IRS raised the 0%, 15% and 20% long-term capital gains tax brackets for 2023 based on inflation.
- You may be in the 0% bracket, even with six figures of joint income with a spouse, depending on taxable income.
- Experts say the 0% capital gains bracket can be a “really good” tax-planning opportunity.
Planning to sell some investments this year? It’s less likely to affect your 2023 tax bill, experts say.
Here’s why: The IRS made dozens of inflation adjustments for 2023, including the long-term capital gains brackets, applying to investments held for more than one year.
This means you can have more taxable income before reaching the 15% or 20% brackets for investment earnings.
“It’s going to be pretty significant,” said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.
Here’s your capital gains tax bracket
With higher standard deductions and income thresholds for capital gains, it’s more likely you’ll fall into the 0% bracket in 2023, Lucas said.
For 2023, you may qualify for the 0% long-term capital gains rate with taxable income of $44,625 or less for single filers and $89,250 or less for married couples filing jointly.
The rates use “taxable income,” calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
For example, if a married couple makes $100,000 together in 2023, their taxable income may easily fall below $89,250 taxable income after subtracting the $27,700 married filing jointly standard deduction.