The IRS announces increased capital gains tax rates for 2025.

• The IRS announced inflation adjustments for the long-term capital gains tax brackets on Tuesday, affecting investments held for over a year.
• In 2025, single filers can earn up to $48,350 in taxable income and married couples filing jointly can earn up to $96,700, and they will not pay any taxes on their long-term capital gains.
• To determine your taxable income, you must subtract the larger of the standard or itemized deductions from your adjusted gross income.

The IRS has unveiled higher capital gains tax brackets for 2025.

The IRS has raised the taxable income limits for long-term capital gains brackets, which apply to assets held for more than one year, in its announcement on Tuesday. Additionally, the agency increased figures for numerous other provisions, including federal income tax brackets, the estate and gift tax exemption, and eligibility for the child tax credit, among others.

Your capital gains tax rate is determined by your taxable income bracket.

To calculate taxable income, subtract the greater of the standard or itemized deductions from adjusted gross income. For 2025, the standard deduction for single filers will be $15,000 and $30,000 for married couples filing jointly. Starting in 2025, single filers will qualify for the 0% long-term capital gains rate with taxable income of $48,350 or less, while married couples filing jointly are eligible with $96,700 or less.