What are the 2027 long-term capital gains tax brackets?+
For tax year 2026 — the confirmed figures that apply to the return filed in 2027 — long-term capital gains are taxed at 0%, 15%, or 20% depending on your total taxable income, per IRS Revenue Procedure 2025-32. Single filers pay 0% up to $49,450, 15% from $49,450 to $545,500, and 20% above $545,500; married filing jointly pay 0% up to $98,900, 15% from $98,900 to $613,700, and 20% above $613,700. The IRS has not yet published official tax-year-2027 capital gains thresholds — those are expected around October 2026 — so this calculator uses the latest confirmed 2026 schedule, which is what actually applies to gains realized in 2026 and reported on the return filed in 2027. Expect the 2027 thresholds to rise by a modest inflation adjustment once published, following the same pattern as prior years.
How is the capital gains bracket different from ordinary income brackets?+
The capital gains bracket structure differs from ordinary income brackets in two ways: it uses only three rates (0%, 15%, and 20%) instead of the seven ordinary-income rates (10% through 37%), and your long-term gain stacks on top of your existing ordinary taxable income rather than being taxed as a separate, standalone amount. That stacking means your gain fills bracket space starting exactly where your ordinary income leaves off, so a large enough gain can span more than one capital gains bracket in a single year. Because the capital gains brackets are also wider than ordinary brackets at comparable income levels — the 15% bracket alone spans from $49,450 to $545,500 for single filers in tax year 2026 (IRS Revenue Procedure 2025-32) — most investors with moderate income pay a lower rate on long-term gains than on their last dollar of ordinary income.
What are the 2027 federal tax brackets?+
The IRS has not yet published official tax-year-2027 brackets — those figures are expected around October 2026. This calculator uses the latest IRS-confirmed schedule instead: the tax-year-2026 brackets from Revenue Procedure 2025-32, which govern the return most filers submit in early 2027. Those seven rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%, and for a single filer the 22% bracket begins at $50,400 of taxable income. Brackets shift upward by roughly 2-3% each year for inflation, so when the IRS releases the 2027 figures, expect each threshold to land slightly above its 2026 counterpart rather than change dramatically. Until that publication, treating the 2026 brackets as your working numbers for the return you file in 2027 is accurate — they are the same return, just described by the calendar year the income was earned in versus the year the paperwork is filed.
What is the difference between marginal and effective tax rate?+
Your marginal tax rate is the rate charged on your last dollar of taxable income — effectively your highest bracket — while your effective tax rate is the average rate you pay across all your income once every lower bracket is factored in. Under the progressive system the IRS uses (10% through 37% for tax year 2026, per Revenue Procedure 2025-32), only the income inside each bracket is taxed at that bracket's rate, so your effective rate is always lower than your marginal rate. For example, a single filer with $90,000 of taxable income sits in the 22% marginal bracket, but because the first $11,925 is taxed at 10%, the next portion at 12%, and so on, their actual effective rate lands closer to 15-16% of total taxable income. Use your marginal rate to judge the tax cost of one more dollar earned; use your effective rate to judge your overall burden.
