Get a Capital Gain Tax Rate of 0%
If taxable income is $63,700 or less for 2008 to 2010, one may be eligible for an capital gains and qualified dividend federal tax rate of ZERO percent. That's correct NO Taxes.
Currently, the long term capital gains and qualified dividend tax rate is 5% for taxpayers in the 5% or 10% tax brackets. Based to the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) and extended by the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA), the 5% rate drops to 0% from 2008 to 2010. In 2011, these rates will sunset and revert to the pre-2001 rates. For more details, please read the article in The CPA Journal.
Capital Gains Tax Minimization for 2008 to 2010
If one has long capital gains, consider selling all or part of those assets, with capital gains profits up to the upper limit of the 15% tax bracket. Then keep one's total taxable income under this upper limit, via standard or itemized deductions and exceptions. By doing this, one will pay ZERO federal taxes on income.
For reference, here are the 2007 maximum limits for the 15% tax bracket:
Maximum for 15% Tax Bracket
Married Filing Jointly
|Married Filing Separately|
|Head of Household|
By the way, this works for anyone under the 15% tax bracket maximum income limits. One does not need to be a retiree:-)
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This is not financial advice. Please consult a professional advisor.
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