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If you’re ready to rebalance investments or harvest profits, you could shield more earnings from capital gains taxes in 2025.
The IRS on Tuesday announced dozens of inflation adjustments for 2025, including long-term capital gains brackets, which apply to assets owned for more than one year.
Starting in 2025, there are higher taxable income thresholds for the 0% capital gains bracket, meaning investors can sell more assets without triggering taxes.
The 0% capital gains bracket creates a “significant opportunity” for tax planning, according to certified financial planner Neil Krishnaswamy, president of Krishna Wealth Planning in McKinney, Texas.
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The 0% capital gains bracket can “allow you to transform your taxable account into a tax-free account, at least temporarily,” said Krishnaswamy, who is also an enrolled agent.
Here’s what to know about the 0% long-term capital gains rate for 2025 and how to qualify.
Who qualifies for 0% capital gains in 2025
Starting in 2025, single filers can qualify for the 0% long-term capital gains rate with taxable income of $48,350 or less, and married couples filing jointly are eligible with $96,700 or less.
However, taxable income is significantly lower than your gross earnings. You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
Most taxpayers use the standard deduction, which also adjusts for inflation. In 2025, the standard deduction increases to $15,000 for single filers and $30,000 for married couples filing jointly.
In 2025, a couple making well over $100,000 could still fall within the 0% capital gains bracket after subtracting the standard deduction, experts say.
For example, if a married couple earns $125,000 together in 2025, their taxable income could be under $96,700 after subtracting the $30,000 standard deduction.
However, “people still need to be mindful about their income and where they may fall within the bracket,” said Ashton Lawrence, a CFP and director at Mariner Wealth Advisors in Greenville, South Carolina. “Surpassing the 0% threshold by even a small amount could mean a 15% tax on all gains above the limit.”
Plus, profitable assets you sell will be part of the taxable income calculation and could bump you above the 0% capital gains threshold. Before selling assets, you should run a full-year tax projection and understand how the increased income could impact your situation.