Capital Gain Bracket


Today TaxMama® hears from Hammed in the TaxQuips Forum, with this interesting question. “What is the income limit for married filing jointly to pay ZERO capital gains tax in 2014? Does the income include the social security benefits?”


Hi Hameed,

Let give you a link to the IRS tax rates for 2014. In order to use the 0% tax rate on capital gains, your taxable income must be in the 10% tax bracket. As you can see, the limit for that is $18,150. (4% CA)

On the other hand, the 15% capital gains rate goes all the way up to $73,800 (8% CA) and that’s also taxed at 0%.

Nothing is simple. Yes, that does include the taxable part of Social Security. For married filing jointly, Social Security starts becoming taxable when HALF of the Social Security + your income exceeds $32,000 Once the overall income starts passing that limit, up to 85% of the SS income is added to the taxable income. Not only can it cause you to jump into a higher tax bracket, it can dramatically increase your overall taxes. So be careful to do some planning.

If you’re trying to do some planning, consider this. Log into Turbo Tax or one of the other tax software tools. You can enter numbers and test out scenarios for free. Do not use their tax calculator tool. It’s not sensitive enough for what you’re trying to work out.

And remember, you can find answers to all kinds of questions about capital gains and other tax and business issues, free. Where? Where else? At

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