Delaware income and capital gains tax ratesĭata source: Comptroller of Maryland.

Tax rates are the same for every filing status. Delawareĭelaware taxes capital gains as income. This applies to long-term and short-term capital gains. ConnecticutĬonnecticut has a capital gains tax of 7%. The state income tax is a flat rate of 4.63%. ColoradoĬolorado taxes capital gains as income. Alabama income and capital gains tax ratesĭata source: State of California Franchise Tax Board. AlabamaĪlabama taxes capital gains as income. If you have questions about capital gains on your tax return, it's a good idea to consult that documentation or a tax professional. Taxpayers should always review the capital gains rules in their state so they know about any relevant exceptions.Īlso, it's important to note that this is the most recent data for each state at the time of this writing - to get exact figures, taxpayers should consult their state's online documentation. Not every rule for every situation is included. Keep in mind that many states have special rules that apply to the sale of certain assets, such as exclusions for collectibles purchased before a certain year. The sections below cover every state's tax laws for capital gains. Others don't tax income or capital gains at all. Some allow taxpayers to deduct a certain amount of capital gains. There are also plenty of states that handle capital gains differently.

Keep in mind that if your state taxes capital gains as income, you'll add your capital gains to your other ordinary income, which may put you in a higher tax bracket. In states that do this, the state income tax applies to both long- and short-term capital gains. State capital gains tax ratesĮach state has its own method of taxing capital gains. Here are the 2021 short-term capital gains and income tax rates:ĭata source: Internal Revenue Service (2020). Federal short-term capital gains tax ratesįederal tax rates on short-term capital gains are equal to income tax rates. That's a total of $1,001 in tax and an overall tax rate of 10.01%. This means that different portions of your taxable income may be taxed at different rates.įor example, a single filer who made $10,000 would pay 10% income tax on their first $9,950 and 12% on the remaining $50. The tables below show marginal tax rates. If you're generating capital gains, tax planning is extra-important. (Note: because you report the realized gain on your asset, it's important to keep track of your cost basis - fortunately, stockbrokers do this for you, but you'll need to do it yourself on things like property and businesses.)įederal tax rates are lower for long-term capital gains, which is why it's generally recommended to hold assets for at least a year to minimize your tax liability. If you've owned and used your house as your main home for at least two out of five years prior to its date of sale, you can exclude up to $250,000 in capital gains if you're a single filer or $500,000 if you're filing jointly with your spouse.

The home sale exclusion is one of the most common. There are exclusions for certain types of capital gains that can help you reduce your taxes. Capital gains are an essential part of understanding how investing and taxes work. Dividends are counted as ordinary income, for example, but qualified dividends are treated as a capital gain.įor example, if you buy a stock for $100 and sell it for $150, you have a capital gain of $50. Most investment income is considered a capital gain, but there are some exceptions. You pay capital gains tax on the profit you made from the sale. Assets subject to capital gains tax include stocks, real estate, cryptocurrency, and businesses. Capital gains tax is the tax you pay after selling an asset that has increased in value.

California tax brackets 2020