| Minimizing capital gains taxes involves strategies that help reduce the amount of taxable income from the sale of investments or assets. The goal is to legally reduce your taxable capital gains or defer them to a later time when you might be in a lower tax bracket or facing lower tax rates. Here are some common strategies to minimize capital gains taxes: Long-term capital gains (for assets held longer than one year) are taxed at lower rates than short-term capital gains, which apply to assets held for one year or less. The long-term capital gains tax rates are typically 0%, 15%, or 20%, depending on your income level, compared to ordinary income tax rates (up to 37%) for short-term gains. If your taxable income is below a certain threshold, you may be eligible for a 0% long-term capital gains tax rate. For example, in 2025: Single filers with taxable income up to $44,625, and Married filing jointly with taxable income up to $89,250. Minimizing capital gains taxes requires a combination of strategies, such as holding investments for the long term, utilizing tax-advantaged accounts, offsetting gains with losses, and considering the timing of sales. By using these strategies, you can reduce the amount of tax you pay on capital gains and keep more of your investment profits. Click here to learn more about Capital Gains and Losses. |
