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Ask A CPA - 2018 Tax Law Changes

2018-Long-Term Capital Gains And Qualified Dividends Tax Rates

Long-Term Capital Gains (and Qualified Dividends) have been subject to special maximum tax rates. The Act generally retains the maximum tax rate structure. For 2018 the 15% rate applies once the following income limits are met: a. Joint returns - $77,200 b. Head of Household returns - $51,700 c. Single returns - $38,600 d. Married Separate returns - $38,600 e. Trusts and Estates - $2,600 For 2018 the 20% rate will apply to long-term capital gains and qualified dividends above these income levels: a. Joint returns - $479,000 b. Head of Household returns - $452,400 d. Married Separate returns - $239,500 e. Trusts and Estates - $12,700 Prior to the Act, a 0% capital gain rate applied to capital gains where the taxpayer is paying in the 10% or 15% rate on ordinary income; a 15% capital gain rate applied to any taxpayer paying any other rate below 39.6%; and a 20% rate applied to the high-income taxpayers paying 39.6% on ordinary income.

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