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The IRS has unveiled the capital gains tax brackets for 2026, with higher earnings limits for the 0% rate. That could offer tax planning opportunities for many investors, financial experts say.
The bigger limit is “pretty incredible, especially in years like this where the market’s been roaring,” said Tommy Lucas, a certified financial planner at Moisand Fitzgerald Tamayo in Orlando, Florida. His firm is ranked No. 69 on CNBC’s Financial Advisor 100 list for 2025.
Despite recent volatility, the S&P 500 was still up nearly 14% year-to-date as of Tuesday afternoon. The index also soared by more than 23% in 2024.
Whether you’re ready to harvest some gains or diversify your taxable portfolio, here’s what to know about the 0% capital gains rate for 2026.
How the 0% capital gains bracket works
The capital gains bracket applies to profitable assets owned for more than one year, known as long-term capital gains. By comparison, investments held for one year or less are short-term, subject to regular income tax rates.
Your capital gains rate depends on taxable income, which is significantly lower than your gross earnings. Those limits are “more generous” for 2026, based on the IRS adjustment, Lucas said.
For 2026, single filers can earn up to $49,450 in taxable income — or $98,900 for married couples filing jointly — and still pay 0% for long-term capital gains. By comparison, the 2025 thresholds are $48,350 for single filers and $96,700 for married couples.
You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
For 2026, the standard deduction was also adjusted for inflation. The tax break is $16,100 for single filers and $32,200 for married couples filing jointly.
However, you need to run projections because any sold profitable assets will increase your taxable income, experts say.
The 0% bracket provides a ‘significant opportunity’
The 0% capital gains bracket offers a “significant opportunity” for tax planning, CFP Neil Krishnaswamy, president of Krishna Wealth Planning in McKinney, Texas, previously told CNBC.
For example, many investors are eager to rebalance their taxable brokerage accounts, but worry about the tax consequences, experts say.
After years of strong stock market performance, “a lot of people have gains in their accounts,” said Lucas. But the 0% bracket could be a chance to rebalance or diversify your brokerage account without triggering a tax bill.
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