IRS sets 2027 capital gains tax brackets and 0% rate limits

The IRS has announced the long-term capital gains brackets for 2027, which apply to investments owned for more than one year. For 2027, single filers can earn up to $51,050 in taxable income, or $102,100 for married couples filing jointly, and still pay 0% for long-term capital gains.

You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income. The new capital gains brackets could impact investors' 2027 plans for sales or rebalancing, which can trigger taxes for investments in a brokerage account, according to CNBC.

In its announcement Thursday, the agency boosted the taxable income limits for the long-term capital gains brackets, which apply to assets owned for more than one year. It also increased figures for dozens of other provisions, including federal income tax brackets, the estate and gift tax exemption, and eligibility for the earned income tax credit, among others.

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The 15% rate applies to taxable income up to $563,200 for single filers and $633,600 for married couples filing jointly. The 20% rate applies to taxable income of $563,201 or more for single filers and $633,601 or more for married couples filing jointly.

The latest round of IRS inflation adjustments for 2027 come as many Americans wrestle with affordability amid the rising cost of housing, groceries, gasoline and other living expenses. For 2027, the standard deduction will rise to $16,600 for single filers, up from $16,100, and $33,200 for married couples filing jointly, up from $32,200.

Planning your investment sales around these brackets can help you keep more of your returns when tax season arrives.

Photo: Carol M. Highsmith, Public domain, via Wikimedia Commons