- Days left
Currently, capital gains tax rates are more favorable than regular income tax rates. That's why it's important for taxpayers who own stocks, bonds, mutual funds, or certain other investments to pay attention to the rules.

Favorable capital gains rates apply when the taxpayer has held the investment for more than a year, referred to as "long-term." If you hold an investment less than a full year, you don't get capital gains rates. So it's important when you're selling an investment to look at how long you've held it. You may want to hold it just a little longer if you're close to a full year of ownership.

What is the capital gains tax rate? If you're in a higher tax bracket, the capital gains rate is 15%. If you're in a lower tax bracket, the capital gains rate is only 5%. There are some exceptions to these rules, but these will apply to most taxpayers.

It pays to look carefully at your holding period for an investment. You could save yourself a significant amount of tax by ensuring that you've got a long-term holding period and are therefore able to get the benefit of capital gains tax rates on that investment. More information on Capital Gains can be found on the IRS website.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Increase your money and finance knowledge from home

How Financial Planners go Grocery Shopping

Learn to shop smart and save.

View Course »

Timing Your Spending

How to pay less by changing when you purchase.

View Course »

TurboTax Articles

2014 Tax Forms for Federal and State Taxes

TurboTax software programs include the tax forms you're likely to need to file your federal and state taxes. And the great thing is they guide you through your tax return so you don't need to know which tax forms to file.You can also find all federal forms and state tax forms at the links below.

What is a 1098-C: Contributions of Motor Vehicles, Boats and Airplanes

When you donate a vehicle to charity, you may be able to deduct it as a charitable contribution if you itemize your deductions. Soon after donating a vehicle, boat or airplane, the charitable organization may send you a Form 1098-C that reports details about the donation that may impact your deduction. In some cases, the Internal Revenue Service may deny your deduction without Form 1098-C attached to your return, so keep it in a safe place.

Add a Comment

*0 / 3000 Character Maximum