March 4th, 2013
What is the short and long term capital gains tax rate for 2013? Why should you care?
What is the short and long term capital gains tax rate for 2013? Why should you care?
The short-term tax rate for 2013 is 43.4%; the long-term tax rate for 2013 is 23.8%. I should care, because if I plan on investing, it is good to know that long-term capital gains are taxed at a lower rate than short-term capital gains.
That was an interesting answer, Katherine. Where did you get those numbers? I’m sure you did not pull them out of mid-air, but they do confuse me a bit. Here are the capital gain rates for 2013.
Short-term capital gains (hold securities 1 year or less) run from 10% (lowest tax bracket) all the way up to 35% (highest tax bracket). Short-term rates are taxed as ordinary income which is what happens when you buy and sell your investments often (mistake). Long-term capital gains (held longer than 1 year) run from 0% for people in the 10 to 15% tax bracket and then 15% for people in the upper tax brackets.
What is the bottom line? Avoid short trading with your assets and this will reduce your short-term capital gains. Buy your assets (no-load index mutual funds) and hold on to them for a LONG time. Patience and time are your friends.
I guess I found those rates at a non-credible source :S I should have went with my gut and put the original answer I had found; Short-term capital gains: anywhere from 10-35%, and long-term capital gains: 0% if you are in the ten or fifteen percent tax brackets; 15% if you are in the twenty-five percent tax bracket or higher.
Well done, Katherine. Finding credible sources has been harder and harder over time. It is something we all deal with.