Get started freeCapital Gains Tax Can Take 15-37% of Your Investment Profits
Sold a stock for profit? You owe capital gains tax. But the rate depends on how long you held it and your income level. Understanding the rules can save you thousands per year.
2026 Capital Gains Tax Rates
| Holding Period | Tax Rate | Single Filer Income |
|---|---|---|
| Short-term (held < 1 year) | 10-37% | Taxed as ordinary income |
| Long-term (held 1+ year) | 0% | $0-$47,025 |
| 15% | $47,026-$518,900 | |
| 20% | $518,901+ |
5 Legal Strategies to Minimize Capital Gains Tax
| Strategy | Savings | How |
|---|---|---|
| Hold for 1+ year | 7-17% lower rate | Long-term rate (15%) vs short-term (22-37%) |
| Tax-loss harvesting | $3,000/yr deduction | Sell losers to offset gains, buy similar (not identical) asset |
| Use tax-advantaged accounts | 100% tax-free growth | Roth IRA, 401(k) — no capital gains tax inside |
| Charitable donations | No capital gains + deduction | Donate appreciated stock instead of cash |
| Harvest gains in low-income years | 0% rate possible | If income is under $47K, long-term gains are tax-free |
Example: you bought $10K of stock, it's now worth $20K. Selling after 11 months: $10K gain × 22% tax = $2,200 owed. Waiting 1 more month (12+ months): $10K × 15% = $1,500. Saving $700 by waiting 30 days.
