2021-2022 Capital Gains Tax Rates — and How to Calculate Your Bill

See long-term & short-term capital gains tax rates, what triggers capital gains tax, how it's calculated & how to save.
Jan 25, 2022

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Capital gains are the profits from the sale of an asset — shares of stock, a piece of land, a business — and generally are considered taxable income. How much these gains are taxed depends a lot on how long you held the asset before selling.

In 2021, the capital gains tax rates are either 0%, 15% or 20% for most assets held for more than a year. Capital gains tax rates on most assets held for less than a year correspond to ordinary income tax brackets (10%, 12%, 22%, 24%, 32%, 35% or 37%).

What is short-term capital gains tax?

Short-term capital gains tax is a tax on profits from the sale of an asset held for one year or less. The short-term capital gains tax rate equals your ordinary income tax rate — your tax bracket. (Not sure what tax bracket you’re in? Review this rundown on federal tax brackets.)

What is long-term capital gains tax?

Long-term capital gains tax is a tax on profits from the sale of an asset held for more than a year. The long-term capital gains tax rate is 0%, 15% or 20% depending on your taxable income and filing status. They are generally lower than short-term capital gains tax rates.

Capital gains tax rules can be different for home sales. Learn more here.

2021 capital gains tax rates

Tax-filing status


Married, filing jointly

Married, filing separately

Head of household


$0 to $40,400

$0 to $80,800

$0 to $40,400

$0 to $54,100


$40,401 to $445,850

$80,801 to $501,600

$40,401 to $250,800

$54,101 to $473,750


$445,851 or more

$501,601 or more

$250,801 or more

$473,751 or more

Short-term capital gains are taxed as ordinary income according to federal income tax brackets.

» Looking for a way to defer capital gains taxes? Putting money in an IRA or a 401(k) could help postpone or even avoid future capital gains tax bills.

2022 capital gains tax rates

Tax-filing status


Married, filing jointly

Married, filing separately

Head of household


$0 to $41,675

$0 to $83,350

$0 to $41,675

$0 to $55,800


$41,676 to $459,750

$83,351 to $517,200

$41,676 to $258,600

$55,801 to $488,500


$459,751 or more

$517,201 or more

$258,601 or more

$488,501 or more

Short-term capital gains are taxed as ordinary income according to federal income tax brackets.

» Having trouble deciding whether and when to sell? A qualified financial advisor can help you understand your options. See some of our picks for the best financial advisors.

How capital gains are calculated

  • Capital gains taxes can apply on investments, such as stocks or bonds, real estate (though usually not your home), cars, boats and other tangible items.

  • The money you make on the sale of any of these items is your capital gain. Money you lose is a capital loss. Our capital gains tax calculator can help you estimate your gains.

  • You can use investment capital losses to offset gains. For example, if you sold a stock for a $10,000 profit this year and sold another at a $4,000 loss, you’ll be taxed on capital gains of $6,000.

  • The difference between your capital gains and your capital losses is called your “net capital gain.” If your losses exceed your gains, you can deduct the difference on your tax return, up to $3,000 per year ($1,500 for those married filing separately).

  • Capital gains taxes are progressive, similar to income taxes.

  • Federal: $24.95 to $64.95. Free version available.

  • State: $29.95 to $44.95.

  • All filers get free live tax advice from a tax pro.

Promotion: NerdWallet users get 25% off federal and state filing costs.

  • Federal: $39 to $89. Free version available.

  • State: $39 per state.

  • Turbo Tax Live packages offer review with a tax specialist.

  • Federal: $29.99 to $84.99. Free version available.

  • State: $36.99 per state.

  • Online Assist add-on gets you on-demand tax help.

Watch out for two things

1. Rule exceptions. The capital gains tax rates in the tables above apply to most assets, but there are some noteworthy exceptions. Long-term capital gains on so-called “collectible assets” can be taxed at a maximum of 28%; these are things like coins, precious metals, antiques and fine art. Short-term gains on such assets are taxed at the ordinary income tax rate.

2. The net investment income tax. Some investors may owe an additional 3.8% that applies to whichever is smaller: Your net investment income or the amount by which your modified adjusted gross income exceeds the amounts listed below.

Here are the income thresholds that might make investors subject to this additional tax:

  • Single or head of household: $200,000

  • Married, filing jointly: $250,000

  • Married, filing separately: $125,000

  • Qualifying widow(er) with dependent child: $250,000

How to minimize capital gains taxes

Hold on

Whenever possible, hold an asset for a year or longer so you can qualify for the long-term capital gains tax rate, since it's significantly lower than the short-term capital gains rate for most assets. Our capital gains tax calculator shows how much that could save.

Exclude home sales

To qualify, you must have owned your home and used it as your main residence for at least two years in the five-year period before you sell it. You also must not have excluded another home from capital gains in the two-year period before the home sale. If you meet those rules, you can exclude up to $250,000 in gains from a home sale if you’re single and up to $500,000 if you’re married filing jointly. (Learn more here about how capital gains on home sales work.)

Rebalance with dividends

Rather than reinvest dividends in the investment that paid them, rebalance by putting that money into your underperforming investments. Typically, you'd rebalance by selling securities that are doing well and putting that money into those that are underperforming. But using dividends to invest in underperforming assets will allow you avoid selling strong performers — and thus avoid capital gains that would come from that sale. (Learn more about how taxes on dividends work.)

Use tax-advantaged accounts

These include 401(k) plans, individual retirement accounts and 529 college savings accounts, in which the investments grow tax-free or tax-deferred. That means you don’t have to pay capital gains tax if you sell investments within these accounts. Roth IRAs and 529s in particular have big tax advantages. Qualified distributions from those are tax-free; in other words, you don’t pay any taxes on investment earnings. With traditional IRAs and 401(k)s, you’ll pay taxes when you take distributions from the accounts in retirement. (Learn more here about taxes on your retirement accounts.)

Carry losses over

If your net capital loss exceeds the limit you can deduct for the year, the IRS allows you to carry the excess into the next year, deducting it on that year’s return.

Consider a robo-advisor

Robo-advisors manage your investments for you automatically, and they often employ smart tax strategies, including tax-loss harvesting, which involves selling losing investments to offset the gains from winners.

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