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3 New Changes to Capital Gains Tax in 2025 You Need to Plan For

Find out how capital gains tax updates could impact your investments.

By Adam Palasciano

Edited by Chris Kissell

Updated Jan. 27, 2025

Changes to capital gains tax rules may be set to impact your bottom line in 2025. Understanding these updates is crucial to navigating the tax landscape and making informed decisions.

Capital gains taxes typically affect those who profit from selling investments. The latest changes could impact your overall tax burden.

If you're ready to start investing or to refine your existing strategy, here's what you need to know about the shifting capital gains rules.

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What are capital gains taxes?

Capital gains taxes are levied on the profit you make from selling an asset, such as stocks, bonds, real estate, or other investments.

These types of taxes fall into one of two categories:

Short-term gains are assessed on gains held for a year or less and are taxed at an individual's regular income tax rate.
Long-term gains are assessed on assets held for more than a year and generally have lower tax rates than short-term gains.

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How do capital gains taxes work?

Capital gains taxes are calculated based on the difference between your purchase price — the basis — and the sales price of an asset. The rate you pay depends on your income and how long you've held the investment.

Long-term capital gains rates are typically 0%, 15%, or 20%, depending on your income. Short-term capital gains are taxed at your regular income rate.

Some assets — such as collectibles — may be subject to their own special rates.

Who pays 0% in 2025?

In 2025, taxpayers with taxable incomes below certain thresholds will continue to enjoy a 0% long-term capital gains rate.

For single filers, this applies to incomes up to $48,350. For married couples filing jointly, the limit is $96,700.

For those filing head of household, the limit is $64,750.

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What is the 15% threshold in 2025?

The 15% capital gains tax rate in 2025 applies to single filers earning between $48,351 to $533,400. For married couples filing jointly, it applies to incomes between $96,701 to $600,050.

For those who file as head of household, the income range is $64,751 to $566,700.

What is the 20% threshold in 2025?

The 20% capital gains tax rate in 2025 applies to single filers earning more than $533,400 and married couples filing jointly with income of more than $600,050.

For those filing head of household, the 20% rate applies to incomes over $566,700.

Which investments get special treatment in 2025?

Certain types of investments receive unique tax advantages under capital gains tax rules, offering opportunities for savvy investors to optimize their strategies.

For instance, long-term gains on collectibles such as art, antiques, or precious metals are taxed at ordinary income rates, but capped at a maximum 28% tax rate.

Owner-occupied real estate provides another valuable benefit: Individuals can avoid capital gains taxes on up to $250,000 (or $500,000 for married couples filing jointly) in gains from the sale of a primary residence if they meet ownership and residency requirements.

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How to avoid capital gains taxes in 2025

While taxes are unavoidable, strategic planning can reduce your liability. Tax-advantaged accounts such as IRAs and 401(k)s allow for growth without immediate taxation.

Additionally, strategies such as tax-loss harvesting — selling losing investments to offset gains — can lower your overall tax burden.

Holding assets longer and timing sales strategically can also make a significant difference in what you owe in taxes.

Bottom line

Proactive financial planning is the best way to address capital gains tax changes in 2025.

By understanding new thresholds and rules, you can make money moves that align your investment decisions with financial goals.

Careful planning can help you turn these changes into opportunities to optimize your investments and stay financially secure. Now is the time to act.

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