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The IRS has revealed the capital gains tax brackets for 2026, along with increased income limits for the 0% tax rate. Financial experts suggest this change might open up some tax planning strategies for a variety of investors.
Tommy Lucas, a certified financial planner from Moisand Fitzgerald Tamayo in Orlando, remarked on this adjustment: “That’s pretty incredible, especially in a year like this when the market is so wild.” His firm is ranked No. 69 on CNBC’s 2025 list of top financial advisors.
Even with the recent market fluctuations, the S&P 500 index was still up nearly 14% as of Tuesday afternoon, having climbed over 23% in 2024.
Whether you’re considering selling or looking to diversify your taxable portfolio, here’s what to understand about the 0% capital gains rate set for 2026.
Understanding the 0% capital gains bracket
The capital gains allowance pertains to assets that have been held for more than one year, known as long-term capital gains. On the flip side, short-term gains are from investments held for a year or less and are taxed at the ordinary income tax rate.
Your taxable income, which is typically lower than gross income, dictates capital gains rates. Lucas mentioned that these limits will “become more generous” in 2026, according to IRS adjustments.
In 2026, single filers can earn up to $49,450, while married couples filing jointly can earn $98,900, both maintaining the 0% rate for long-term capital gains. In comparison, the 2025 thresholds stand at $48,350 for single filers and $96,700 for married couples.
Taxable income is calculated by subtracting the greater of the standard deduction or itemized deductions from your adjusted gross income.
For 2026, the basic deduction is also adjusted for inflation, coming in at $16,100 for single filers and $32,200 for married couples filing jointly.
Experts caution, however, that selling profitable assets can increase your taxable income, so it’s wise to plan your moves carefully.
A significant opportunity with the 0% rate
The 0% capital gains bracket presents a “huge opportunity” for tax planning, according to Neil Krishnaswamy, president of Krishna Inc. Wealth Planning in McKinney, Texas. He noted this previously in a conversation with CNBC.
Many investors are keen on rebalancing their taxable brokerage accounts but hesitate due to potential tax impacts. “A lot of people are seeing gains in their accounts,” Lucas observed, pointing out that this is notable after a period of strong market performance. The 0% bracket may allow for rebalancing or diversification without triggering a tax bill.
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