The IRS announced a raft of changes to tax rules for tax year 2026 on Thursday, including higher brackets for capital gains tax.
A quick reminder of how these work. If you sell an investment you hold in a taxable account for more than you paid for it, you realize a capital gain. Profits on investments you’ve held for a year or less are taxed at your regular income tax rate (the IRS announced boosts to those brackets, too).
Profits on assets you’ve held for longer than a year are subject to the long-term capital gains rate, which, depending on your income, is either 0%, 15% or 20%.
The upshot of the IRS changes is that you can make more money next year and still qualify for a lower rate on your gains. For the purposes of these brackets, the IRS looks at your taxable income, found by subtracting any deductions, standard or itemized, from your gross income for the year.
For 2026, individuals with taxable income up to $49,450 qualify for the 0% rate, as do married couples filing jointly with incomes up to $98,900.
