How to Use the Capital Gains Tax Calculator
When you sell stocks or other investments for a profit, you owe capital gains tax. The rate depends on how long you held the investment and your taxable income. This calculator helps you estimate your tax liability so you can plan your sales strategically.
Short-Term vs Long-Term Capital Gains
Assets held for one year or less generate short-term capital gains, taxed as ordinary income (10-37%). Assets held longer than one year generate long-term capital gains, taxed at 0%, 15%, or 20%. The tax savings from long-term treatment can be substantial — a 22% bracket investor saves 7% by waiting.
Net Investment Income Tax (NIIT)
High-income earners (MAGI over $200,000 single or $250,000 married) owe an additional 3.8% NIIT on investment income. This calculator shows the base federal rate; add 3.8% if you're in this category. State taxes are separate and not included here.
Tax-Loss Harvesting
You can reduce your tax bill by selling losing positions to offset gains. Capital losses offset capital gains dollar-for-dollar. If losses exceed gains, you can deduct up to $3,000 against ordinary income per year, carrying forward any remaining losses.
Frequently Asked Questions
Most states tax capital gains as ordinary income. California taxes them at up to 13.3%, while states like Texas, Florida, and Nevada have no state income tax. This calculator only covers federal taxes.
In a traditional 401(k) or IRA, gains grow tax-deferred and withdrawals are taxed as ordinary income. In a Roth IRA, qualified withdrawals are completely tax-free. Neither account triggers capital gains tax during the accumulation phase.