Buyseotools Trading How much you can make in 2024 and still pay 0% capital gains taxes

How much you can make in 2024 and still pay 0% capital gains taxes

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If you’re planning to sell investments or rebalance brokerage assets next year, it’s possible you won’t trigger a tax bill for 2024.

The IRS on Thursday released dozens of inflation adjustments for 2024, including increases in income tax brackets, standard deductions and income thresholds for capital gains.

For 2024, there are higher thresholds for the 0%, 15% and 20% long-term capital gains brackets, applying to assets owned for more than one year. 

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“It’s great from a tax planning perspective,” said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida. “There’s definitely an opportunity to take some gains next year.”

If you’re in the 0% capital gains bracket, you can sell long-term assets or rebalance your taxable portfolio without adding to your tax liability, he said.

How to calculate your capital gains tax bracket

However, many investors don’t know that capital gains brackets use “taxable income,” which is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

“It’s really quite a bit of capital gains you can receive without paying any tax,” said certified public accountant Tom Wheelwright, CEO of WealthAbility.  

For example, if a married couple earns $125,000 together in 2024, their taxable income may fall below $94,050 after they subtract the $29,200 standard deduction for married couples filing jointly.

Who may fall into the 0% capital gains bracket

There are several scenarios where higher earners may unknowingly fall into the 0% capital gains bracket for 2024, experts say.

For example, retirees who haven’t started collecting Social Security income or required minimum distributions “absolutely should be looking at this,” Wheelwright said, noting that $94,050 of taxable income is a “pretty big number.”

You may also fall into the 0% capital gains bracket if you experienced a job loss or lower revenue as a business owner.

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