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How much income you may have for 0% capital gains taxes in 2023


When you’re planning to sell investments or rebalance your taxable portfolio, chances are you’ll be less more likely to trigger a tax bill in 2023, experts say.

This week, the IRS released dozens of inflation adjustments for 2023, including higher income tax brackets, increased standard deductions, larger estate tax exclusions and more. 

The agency also bumped up income thresholds for the 0%, 15% and 20% long-term capital gains brackets for 2023, levied on profitable assets held for a couple of yr.

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“It is going to be pretty significant,” said Tommy Lucas, an authorized financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.

know your capital gains tax bracket

With higher standard deductions and income thresholds for capital gains, it’s more likely you may fall into the 0% bracket in 2023, Lucas said.

For 2023, chances are you’ll qualify for the 0% long-term capital gains rate with taxable income of $44,625 or less for single filers and $89,250 or less for married couples filing jointly.

The rates use “taxable income,” calculated by subtracting the greater of the usual or itemized deductions out of your adjusted gross income.

By comparison, you may fall into 0% long-term capital gains bracket in 2022 with a taxable income of $41,675 or less for single filers and $83,350 or less for married couples filing jointly.

The 0% bracket is a ‘really good tax planning opportunity’

With taxable income below the thresholds, you may sell profitable assets without tax consequences. And for some investors, selling could also be a likelihood to diversify amid market volatility, Lucas said.

“It’s there, it’s available, and it’s a very good tax planning opportunity,” he added.

Whether you are taking gains or tax-loss harvesting, which uses losses to offset profits, “you actually need to have a handle in your entire reportable picture,” said Jim Guarino, a CFP, CPA and managing director at Baker Newman Noyes in Woburn, Massachusetts.

That features estimating year-end payouts from mutual funds in taxable accounts — which many investors aren’t expecting in a down yr — and should cause a surprise tax bill, he said.

“Some additional loss harvesting might make a whole lot of sense in the event you’ve got that additional capital gain that is coming down the road,” Guarino said.

After all, the choice hinges in your taxable income, including payouts, since you will not have taxable gains within the 0% capital gains bracket.

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