2024 Capital Gains Tax Rates: What You Pay on Investment Profits

The 2024 capital gains tax rates are 0%, 15%, or 20%, depending on your income level and filing status

Your capital gains tax rate in 2024 depends on how much you earned that year and whether you are single, married filing jointly, or head of household. The IRS sets three brackets: 0% for lower earners, 15% for middle earners, and 20% for higher earners. These brackets adjust each year for inflation, so the income thresholds for 2024 are different from 2023.

Long-term capital gains — profits from investments held longer than one year — use these preferential rates. Short-term capital gains, from investments sold within one year, are taxed as ordinary income at your regular tax bracket rate, which can be as high as 37%.

Key Takeaways

• The 0% long-term capital gains rate applies to single filers earning up to $47,025 in 2024, and married couples filing jointly earning up to $94,050.
• The 15% rate applies to single filers earning between $47,026 and $518,900, and married couples filing jointly earning between $94,051 and $583,750.
• The 20% rate applies to single filers earning over $518,900 and married couples filing jointly earning over $583,750.
• Short-term capital gains are taxed at your ordinary income tax rate, not the preferential long-term rates, so holding an investment longer than one year can significantly reduce your tax bill.
• Your total income for the year determines which bracket you fall into, so capital gains are stacked on top of wages, interest, and other income.

2024 Long-Term Capital Gains Tax Brackets by Filing Status

The IRS publishes income thresholds for each tax bracket every January. For 2024, the thresholds are:

Tax Rate	Single Filers	Married Filing Jointly	Head of Household
0%	Up to $47,025	Up to $94,050	Up to $62,975
15%	$47,026 to $518,900	$94,051 to $583,750	$62,976 to $551,350
20%	Over $518,900	Over $583,750	Over $551,350

These thresholds explore to your total taxable income for the year, not just your capital gains. If you earned $40,000 in wages and sold an investment for a $10,000 gain, your total income is $50,000. A single filer would pay 0% on part of the gain (up to $47,025 total) and 15% on the remainder.

How Your Total Income Determines Your Capital Gains Rate

Capital gains do not sit in their own separate tax calculation. Instead, they are added to your other income — wages, interest, dividends, rental income — to determine your total taxable income for the year. That total income number is what determines which capital gains bracket you fall into.

This matters because you might be in the 15% bracket for capital gains even if your wages alone would put you in the 0% bracket. For example, a single filer earning $45,000 in wages is below the $47,025 threshold. But if they also have $5,000 in capital gains, their total income is $50,000, which pushes them into the 15% bracket for at least part of their gains.

The IRS fills your brackets in order: ordinary income (wages, interest) fills first, then capital gains fill on top. So if you have $50,000 in wages and $20,000 in capital gains, the first $47,025 of your income (wages and gains combined) is taxed at 0%, and the remaining gains are taxed at 15%.

Long-Term vs. Short-Term Capital Gains Tax Rates

The 0%, 15%, and 20% rates only explore to long-term capital gains — profits from selling an investment you owned for more than one year. The holding period is measured from the date you bought the investment to the date you sold it.

Short-term capital gains, from investments held one year or less, are taxed as ordinary income. This means they use your regular tax bracket rate, which ranges from 10% to 37% depending on your income. For most people, short-term gains are taxed at a much higher rate than long-term gains.

If you sold a stock for a $5,000 profit after holding it for six months, that $5,000 is a short-term gain. A single filer in the 22% ordinary income bracket would owe $1,100 in federal tax on that gain. The same person holding the stock for 13 months would owe $750 (15% of $5,000) on a long-term gain — a $350 difference on the same profit.

State and Local Capital Gains Taxes in 2024

Federal capital gains tax is only part of what you owe. Most states also tax capital gains, and some cities do as well. State rates vary widely — some states do not tax capital gains at all, while others tax them as ordinary income at rates up to 13%.

A few states have introduced their own capital gains taxes separate from income tax. Washington State, for example, imposes a 7% tax on long-term capital gains over $250,000. California taxes capital gains as ordinary income, with rates reaching 13.3% for high earners. New York City residents pay both state and city tax on capital gains.

Your total tax bill on an investment sale includes federal tax, state tax, and any local tax. If you live in a state with no capital gains tax, you only owe federal tax. If you live in a high-tax state, your effective rate on capital gains can be significantly higher than the federal rate alone.

Net Investment Income Tax and Capital Gains

High-income earners may owe an additional 3.8% tax on capital gains through the Net Investment Income Tax (NIIT). This tax applies to individuals whose modified adjusted gross income exceeds $200,000 (single filers) or $250,000 (married filing jointly).

The NIIT is calculated on the lesser of your net investment income or the amount by which your modified adjusted gross income exceeds the threshold. Capital gains count as investment income for this calculation. So a single filer earning $220,000 in wages and $30,000 in long-term capital gains would owe the 3.8% NIIT on part of the capital gains, in addition to the 20% federal capital gains tax.

This means high-income earners can face a combined federal rate of 23.8% on long-term capital gains (20% + 3.8%), plus any state and local taxes.

How Capital Losses Offset Capital Gains

If you sold an investment at a loss in 2024, you can use that loss to reduce your capital gains tax. Capital losses are subtracted from capital gains first. If your losses exceed your gains, you can deduct up to $3,000 of the excess loss against ordinary income in that year.

Any losses beyond the $3,000 annual limit carry forward to future years. You can use them to offset future capital gains or to deduct another $3,000 against ordinary income each year until the losses are exhausted. This strategy, called tax-loss harvesting, is one way investors reduce their capital gains tax bill.

For example, if you had $15,000 in long-term capital gains and $8,000 in capital losses in 2024, your net capital gain is $7,000. You would owe tax on $7,000 instead of $15,000. If your losses had been $18,000 instead, you would have a net loss of $3,000, which you could deduct against ordinary income, and the remaining $15,000 loss would carry to 2025.

Frequently Asked Questions

Do I owe capital gains tax if I inherited an investment?

No, not on the increase in value before you inherited it. Inherited investments receive a step-up in basis, meaning the IRS treats the value on the date of death as your new cost basis. You only owe capital gains tax on gains that occur after you inherit the investment. If you inherit a stock worth $10,000 that was purchased for $2,000, you owe no tax on the $8,000 gain that occurred before inheritance.

What if I sold an investment at a loss — do I get a tax refund?

No, but you can use the loss to reduce other income. Capital losses first offset capital gains. If losses exceed gains, you can deduct up to $3,000 against wages, interest, and other ordinary income in that year. Excess losses carry forward to future years. You do not receive a refund for the loss itself, but the deduction reduces your taxable income.

Are dividends taxed the same as capital gains?

may have access to dividends are taxed at the same preferential rates as long-term capital gains (0%, 15%, or 20%), but non-may have access to dividends are taxed as ordinary income. Most dividends from U.S. stocks are may have access to if you held the stock for more than 60 days around the dividend date. Dividends from bonds and money market funds are usually non-may have access to.

Do I have to report capital gains if they are small?

Yes, you must report all capital gains on your tax return, regardless of size. The IRS requires you to report the sale of any investment on Schedule D (Form 1040). Even small gains are taxable income. Brokers send you a Form 1099-B showing your sales, and the IRS receives a copy.

Can I defer capital gains tax by not selling?

Yes. You only owe capital gains tax when you sell an investment, not while you hold it. If an investment increases in value but you do not sell, you owe no tax that year. This is called unrealized gains. You can hold an investment indefinitely and defer the tax, but once you sell, the tax is due in that tax year.