The IRS has announced higher capital gains tax brackets for 2025. In its recent announcement, the agency has increased the taxable income limits for long-term capital gains brackets, which pertain to assets held for over one year.
Additionally, the IRS has raised figures for numerous other provisions, including federal income tax brackets, the estate and gift tax exemption, and eligibility for the earned income tax credit, among others.
The rate at which capital gains are taxed depends on the taxpayer’s bracket based on their taxable income. Taxable income is calculated by subtracting either the standard or itemized deductions, whichever is greater, from the adjusted gross income. For 2025, the standard deduction will increase to $15,000 for single filers and $30,000 for married couples filing jointly.
Starting in 2025, single filers will qualify for the 0% long-term capital gains rate with a taxable income of $48,350 or lower, while married couples filing jointly will qualify with $96,700 or less.
