The capital gains tax rate reaches 8.75%. They are allowed to deduct up to 40% of capital gains (at a maximum of $350,000 and not exceeding 40% of federal taxable income) on long-term assets held over three years. Vermont taxes short-term capital gains as income, as well as long-term capital gains that a taxpayer holds for up to three years. Oregon taxes capital gains as income and the rate reaches 9.9%. New York taxes capital gains as income and the rate reaches 8.82%. New Jersey taxes capital gains as income and the rate reaches 10.75%. Taxes capital gains as income and the rate reaches a maximum of 9.85%. Taxes capital gains as income and the rate reaches 8.53%. Hawaii taxes capital gains at a lower rate than ordinary income. The states with the highest capital gains tax are as follows:Ĭalifornia taxes capital gains as ordinary income. States With the Highest Capital Gains Tax Rates The rates listed below are for 2022, which are taxes you’ll file in 2023. states have an additional capital gains tax rate between 2.9% and 13.3%. States That Tax Capital GainsĪ majority of U.S. New Hampshire specifically taxes investment income (including interest and dividends from investments) only, but not wages. This is because many of these states do not have an income tax. The following states do not tax capital gains: After federal capital gains taxes are reported through IRS Form 1040, state taxes may also be applicable. Short-term gains are taxed as ordinary income based on your personal income tax bracket. Short-term capital gains come from assets held for under a year.īased on filing status and taxable income, long-term capital gains for tax year 2023 will be taxed at 0%, 15% and 20%. Long-term capital gains come from assets held for over a year. Capital gains vary depending on how long an investor had owned the asset before selling it.
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