Mainstreet Financial Education · Tax Year 2026
Sell an investment held more than a year and the profit is taxed at its own preferential rate, often lower than your income tax. Where you land depends on your total taxable income.
| Rate | Taxable income |
|---|---|
| 0% | Up to $49,450 |
| 15% | $49,451 – $545,500 |
| 20% | Over $545,500 |
| Rate | Taxable income |
|---|---|
| 0% | Up to $98,900 |
| 15% | $98,901 – $613,700 |
| 20% | Over $613,700 |
These are taxable income thresholds, measured after your standard or itemized deductions. Your ordinary income fills the lower bands first, then the gain stacks on top, so a single sale can be split across more than one rate.
A single filer with $70,000 in wages realizes a $60,000 long-term gain.
The 2026 standard deduction of $16,100 comes off first, leaving $53,900 of taxable ordinary income. That already fills the 0% band, so the entire gain stacks above it. The portion of the gain that fits below the $545,500 line is taxed at 15%; none reaches the 20% band.
In a low-income year, long-term gains inside these limits can be realized at no federal tax, which opens the door to gain-harvesting and Roth-conversion planning.
Subtracted before brackets apply. A separate 3.8% Net Investment Income Tax can also apply once income exceeds $200,000 (single) or $250,000 (married).
When you sell can matter as much as what you sell.
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