The IRS recently released the long-term capital gains tax brackets. This move has a big impact on investors and financial planners in helping them get ready for the upcoming tax year. For 2026, individuals and married couples will see changes in the rates that apply to profits from assets held longer than one year. The new rates will influence investment strategies as the December 31 deadline approaches for taxpayers looking to optimize their tax obligations.
The long-term capital gains tax rate is categorized into three tiers: 0%, 15%, and 20%, based on an individual’s or couple’s taxable income. For individual filers, that means they would only qualify for the 15% rate if their taxable income is below $545,500. For married couples filing jointly, this threshold jumps up to $613,700. Anyone who makes more than these amounts will have a 20% surcharge on their capital gains, in the form of a tax.
Starting in 2026, that will all change. People with a taxable income under $49,450 will be eligible for the 0% capital gains rate on that income. In the same vein, married couples filing jointly will have their threshold raised to $98,900. This 0% rate provides a gigantic benefit for lower-earning taxpayers, letting them keep much more of their investment gains.
Short-term capital gains are the profits from selling an asset held for one year or less. You’ll still be paying ordinary income tax rates on these gains. That’s why investors frequently take advantage of a popular investing strategy known as tax-loss harvesting. They sell underperforming investments in order to offset gains on their profitable ones. This practice has provided them the ability to keep their total tax burden low.
With the end of the year fast approaching, most investors and financial professionals turn their attention to capital gains planning. The last quarter is typically a busy period for reviewing investment portfolios, assessing potential gains, and considering strategies to mitigate taxes. If you have taxable gains elsewhere accrued this year, it’s time to get with a financial advisor. They’re an excellent resource for helping you successfully comply with IRS regulations.
The IRS has additionally released inflation-adjusted increases to income tax brackets, thus additionally affecting how taxpayers should go about minimizing their liabilities. December 31 serves as a critical deadline for individuals seeking to reduce their tax burdens by selling assets at a profit or utilizing losses to offset gains.