Article: 50307
Overview
If your return includes qualified dividends or long-term capital gains, your tax is calculated using the Qualified Dividends and Capital Gains Tax Worksheet — not the standard tax table.
This calculation appears on Line 16 of your 1040 and is shown in your PDF.
What Is Capital Gains Tax?
Net capital gains are taxed at different rates depending on your income. For 2024:
- 0% rate applies if taxable income is ≤ $47,025 (single), $94,050 (MFJ), $63,000 (HoH).
- 15% applies between those thresholds and up to $518,900 (single), $583,750 (MFJ), etc.
- 20% applies above those thresholds.
Special cases:
- Qualified small business stock (Section 1202): 28% max rate.
- Collectibles (e.g., art, coins): 28% max rate.
- Unrecaptured Section 1250 gain: 25% max rate.
Short-term capital gains are taxed as regular income at standard tax rates.
Further Information
See IRS: Tax Topic 409 – Capital Gains and Losses for more information.