FISCAL CLIFF NOTES – CAPITAL GAINS
Under the new American Taxpayer Relief Act (“ATRA”), taxpayers whose ordinary income is generally taxed at a rate below 25%, capital gains and dividends will permanently be subject to a 0% rate. Taxpayers who are subject to a 25%-or-greater rate on ordinary income, but whose income levels fall below the $400,000/$450,000 thresholds, will continue to be subject to a 15% rate on capital gains and dividends.
Income Tax Rates
|
Rate |
Single |
Married Joint |
Head of Household |
| 10% | $0 to $8,950 | $0 to $17,900 | $0 to $12,750 |
| 15% | $8,950 to $36,250 | $17,900 to $72,500 | $12,750 to $48,600 |
| 25% | $36,250 to $87,850 | $72,500 to $146,400 | $48,600 to $125,450 |
| 28% | $87,850 to $183,250 | $146,400 to $223,050 | $125,450 to $203,150 |
| 33% | $183,250 to $398,350 | $223,050 to $398,350 | $203,150 to $398, 350 |
| 35% | $398,350 and up | $398,350 and up | $398,350 and up |
Capital Gains
| Rate | Single | Married Joint | Head of Household |
| 0% | Up to $36,250 | Up to $72,500 | Up to $48,600 |
| 15% | $36,250 to $400,000 | $72,500 to $450,000 | $48,600 to $425,000 |
| 20% | $400,000+1 | $450, 000+1 |
1Plus an additional 3.8% investment income surtax for Health Care Reform Act funding, for a total effective rate of 23.8%.