Is capital gains tax progressive?

[n_bear]

Hi All,

I'm trying to plan my income in retirement and am wondering how to calculate federal income tax on long-term capital gains.  I plan to have income solely from capital gains.  My understanding is that in 2014, as a single filer, if I had an AGI of $36,900 or less (15% bracket) my tax liability would be $0. 

What would happen if my AGI is $100 more for a total of $37,000 (25% bracket)? 
Would I owe:
37,000 x .15 =  $5500
or
100 x .15 = $15
?

Thanks in advance!

[NoraLenderbee]

Hi All,

I'm trying to plan my income in retirement and am wondering how to calculate federal income tax on long-term capital gains.  I plan to have income solely from capital gains.  My understanding is that in 2014, as a single filer, if I had an AGI of $36,900 or less (15% bracket) my tax liability would be $0. 

What would happen if my AGI is $100 more for a total of $37,000 (25% bracket)? 
Would I owe:
37,000 x .15 =  $5500
or
100 x .15 = $15
?

Thanks in advance!

Long-term capital gains will still be taxed at 15%. Short-term gains are taxed like ordinary income.

[Gone Fishing]

Playing with Tax Caster has proven to be one of the best tools to help me understand what happens to my taxes when I make changes.

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

[n_bear]

Playing with Tax Caster has proven to be one of the best tools to help me understand what happens to my taxes when I make changes.

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

Wow!  This tool is great, thank you!

[Catbert]

You'd owe $20.  Only long term capital gains which exceed your 15% income tax bracket are taxed at 20%.  If it was short term capital gains then it would be $25 ($100 x .25)

[MDM]

Hi All,

I'm trying to plan my income in retirement and am wondering how to calculate federal income tax on long-term capital gains.  I plan to have income solely from capital gains.  My understanding is that in 2014, as a single filer, if I had an AGI of $36,900 or less (15% bracket) my tax liability would be $0. 

What would happen if my AGI is $100 more for a total of $37,000 (25% bracket)? 
Would I owe:
37,000 x .15 =  $5500
or
100 x .15 = $15
?

Thanks in advance!

$37,000 - $6,200 (std. deduction) - $3,950 (1 exemption) = $26,850 taxable income.

If this is all long term capital gains (LTCG) your tax would still be $0.

You get up to $47,050 in LTCG before you have to pay tax.  If you have $47,150 you will pay $15.  See http://apps.irs.gov/app/vita/content/globalmedia/capital_gain_tax_worksheet_1040i.pdf.

You can also play "what if?" with the spreadsheet in http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-%27case-study%27-topic/msg274228/#msg274228.