TCJA separated the tax rate thresholds for capital gains from the tax brackets for ordinary income for taxpayers with higher incomes (table 1). The country's highest earners are subject to a 20% rate, while lower earners don't pay any taxes on long-term capital gains. The Tax Cuts and Jobs Act (TCJA), enacted at the end of 2017, retained the preferential tax rates on long-term capital gains and the 3.8 percent NIIT. Currently, the majority of tax filers are subject to a 15% long-term capital gains tax rate. Long-term capital gains apply to any investment held for a year and a day (or longer), and your tax rate for long-term gains is based on your income level and tax bracket. Because short-term capital gains are taxed at a higher rate than long-term gains, it often pays to hold your investments long enough to take advantage of those lower rates. The more you earn, the higher your tax bracket and corresponding short-term capital gains tax rate will be. Married Filing Jointly Tax Bracket/ Short-Term Capital Gains Tax Rate
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