Hidden Value: Think You Know the Capital Gains Tax Rate? Think Again.

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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

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This entry was posted in ThinkAdvisor, Hidden Value, Joe Elsasser, Tax