How has the capital gains tax changed, and how does it affect me?

 In Tax Law

In the Tax Cuts and Jobs Act of 2017 signed into federal law in December, the American tax code underwent many changes. However, the capital gains tax structure has, for the most part, stayed the same.

Short-term capital gains, on assets held for a year or under, maintain their taxing status as ordinary income. Long-term capital gains, for assets held for more than a year, maintain their status as taxed based on tax bracket: 0%, 15%, or 20%.

The biggest difference to note here is that the income thresholds for many tax brackets have been raised; thus, the marginal tax rates have been lowered, and in general, this has resulted in short-term capital gains tax cuts.

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