Here’s what You Should Know about Capital Gains Tax 2014
Did you sell certain assets such as stocks or bonds during the tax year? If so, you’ll need to report it on your tax return as a capital gains. The tax you pay on it will be dependent on the type of capital gain it is and your income tax bracket.
As of 2013, the capital gains tax rate has become significantly more complicated. Fortunately, RapidTax is here to help clarify how much you’ll need to pay in capital gain tax. We’re also here to help you report your capital gains; both short term and long term.
Difference Between Long Term & Short Term Capital Gains
You may incur capital gains if you sell a certain asset such as;
- stocks
- bonds
- property owned & used for personal purposes
- property owned & used for investment purposes
Do note however; not all capital gains are the same. The IRS divides capital gains into two categories; short-term and long-term. Short-term and long-term capital gains are taxed differently. Before learning the capital gains rates, you’ll first need to know the difference between the two;
- Short-term capital gains: assets held for one year or less and sold
- Long-term capital gains: assets held for longer than one year and sold
2014 Capital Gains Tax Rates:
Short-term capital gains tax rates:
Short-term capital gains are taxed at the same rate as your ordinary income. There’s no special tax rate. Keep in mind that this only applies to assets held for one year or less. The time period starts the day after you acquire it and goes until the day you sell it (including the day sold).
Long-term capital gains tax rates:
If you’re asset was held for over a year and sold, it’s considered a long-term capital gain and will be taxed at a different rate than your ordinary income. The rate you’ll be taxed is dependent on what tax bracket you fall into.
For 2014, Long-term capital gains tax rates are as follows;
- 0% if you fall into the 10% or 15% tax bracket. This includes singles filers with incomes below $36,900.
- 15% if you fall into the 25%, 28%, 33%, or 35% tax bracket. This includes single filers whose incomes fall into the $36,900-$406,750 range.
- 20% if you fall into the new 39.6% tax bracket. This includes single people earning over $406,750 and married couples making over $457,600.
Report Your Capital Gains Today
If you need to report 2013 Capital Gains, you can still prepare a late 2013 tax return with RapidTax.
All caught up? E-file your 2014 taxes with RapidTax!
We’re here to help you with any tax questions you may have.
Photo via Chris Potter on Flickr
