Hidden Value is a new column in ThinkAdvisor where Joe Elsasser, CFP®, answers common questions with insights advisors and their clients may not have considered. This week he discusses the common belief that the tax rate is 15% on capital gains, and how the tiered bracket structure of qualified dividends and long-term capital gains can actually create some unique opportunities.

Here's an excerpt:

"The tiered structure of the capital gains brackets creates unique opportunities to take advantage of the zero percent rate. For instance, for a married couple in 2018, the standard deduction is $24,000 plus an additional $2,600 if both are over 65 years old or blind. That means a married couple filing jointly, both over 65, could actually have $103,800 of capital gains and pay no federal income tax at all!"

For clients who are recently retired and have a choice from which account they should be spending, there are often opportunities to take advantage of the zero percent capital gains rate. 

Read the article in its entirety

Subscribe to our blog