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Capital Gains Tax 2014

Here’s what You Should Know about Capital Gains Tax 2014

Did you sell certain assets such as stocks or bonds during the tax year? If so, you’ll need to report it on your tax return as a capital gains.  The tax you pay on it will be dependent on the type of capital gain it is and your income tax bracket.

As of 2013, the capital gains tax rate has become significantly more complicated. Fortunately, RapidTax is here to help clarify how much you’ll need to pay in capital gain tax. We’re also here to help you report your capital gains; both short term and long term.

Difference Between Long Term & Short Term Capital Gains

You may incur capital gains if you sell a certain asset such as;

  • stocks
  • bonds
  • property owned & used for personal purposes
  • property owned & used for investment purposes

Do note however; not all capital gains are the same. The IRS divides capital gains into two categories; short-term and long-term. Short-term and long-term capital gains are taxed differently. Before learning the capital gains rates, you’ll first need to know the difference between the two;

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What is the Tax Rate for Short Term Capital Gains?

2014 Short Term Capital Gains are taxed as “ordinary” income

As of 2013, individuals earning an income of $450,0001 and over saw an increase in the capital gains tax rate. For this group, long term capital gains tax rate jumped from 15% to 20% while the short term 2013 capital gains tax rates increased by 4.6%.

Check out part one of this article, to learn about long term capital gains. Keep reading for more on short term capital gains and how they relate to filing your taxes. 

2014 Tax Return Coupon

What are short term capital gains?

A Capital gain is a profit made from selling any asset when the sale price exceeds the purchase price.

The capital gains clock begins the day after you acquire the asset until the day you sell it (this includes day you sell it). Depending on how long the capital gain is held for will determine if it falls into the short-term category or long-term.

Continue reading “What is the Tax Rate for Short Term Capital Gains?”