Question 1

What is the difference between short-term and long-term capital gains?

Accepted Answer

Short-term capital gains come from assets held one year or less and are taxed at your ordinary income tax rate. Long-term capital gains come from assets held more than one year and are taxed at preferential rates of 0%, 15%, or 20% depending on your taxable income and filing status.

Question 2

What are the 2025 long-term capital gains tax rates?

Accepted Answer

For tax year 2025, long-term capital gains rates are 0%, 15%, and 20%. For single filers, the 0% rate applies up to $48,350 of taxable income, 15% from $48,351 to $533,400, and 20% above $533,400. Thresholds differ for married filing jointly, head of household, and married filing separately.

Question 3

What is the Net Investment Income Tax (NIIT)?

Accepted Answer

The Net Investment Income Tax is an additional 3.8% tax on investment income (including capital gains) that applies to taxpayers with modified adjusted gross income above $200,000 (single) or $250,000 (married filing jointly). This calculator includes the NIIT when your income crosses the threshold.

Question 4

Does this calculator include state taxes?

Accepted Answer

No. This calculator estimates US federal capital gains tax only. State capital gains taxes vary widely — some states tax gains as ordinary income, some have no income tax, and a few have special rates. Always consult a tax professional for your exact situation.

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