- Standard deduction$16,100
- Taxable income$71,400
- Tax on interest, short-term gains and other dividends22 %−$110
- Tax at 15 %15 %−$1,800
An estimate under the rules for the chosen year, for typical cases. It is not tax advice: check the result with the tax office or an adviser before you file.
How it is calculated
Interest, short-term gains and non-qualified dividends are added to your other income and taxed with the ordinary brackets.
Long-term gains and qualified dividends are stacked on top of your ordinary taxable income. The part that falls below the 0 % threshold is tax free, the part up to the 20 % threshold is taxed at 15 %, and the rest at 20 %. For 2026 the 0 % rate applies up to $49,450 of taxable income for single filers and $98,900 for joint filers.
If your income is above $200,000 ($250,000 joint), the 3.8 % Net Investment Income Tax is added on top. The result shows how much tax your investments add to the tax you already owe on your other income.
- Federal taxes only. State and local income tax is not included.
- You take the standard deduction. Other income is taxed as ordinary income before any investment income.
- Gains are net gains for the year. Capital losses, the $3,000 loss deduction and loss carryovers are not modeled.
- Long-term gains (assets held more than a year) and qualified dividends use the 0 %, 15 % and 20 % rates. Short-term gains, non-qualified dividends and interest are taxed as ordinary income.
- Collectibles (28 %) and unrecaptured Section 1250 gain (25 %) are not modeled.
- The 3.8 % Net Investment Income Tax applies to the smaller of your investment income and the amount your income exceeds $200,000 (single, head of household) or $250,000 (married filing jointly). Those thresholds are not indexed.
- Tax-exempt municipal bond interest and income inside IRAs or 401(k) plans should not be entered.
Questions
What is the difference between short-term and long-term capital gains?
An asset held for one year or less gives a short-term gain, taxed like wages. Held for more than one year, the gain is long-term and gets the lower 0 %, 15 % or 20 % rates.
Can I really pay 0 % on capital gains?
Yes, if your taxable income including the gain stays below the 0 % threshold. In 2026 that is $49,450 for single filers, $66,200 for heads of household and $98,900 for married couples filing jointly.
What makes a dividend qualified?
It must come from a US company or a qualified foreign company, and you must have held the shares for more than 60 days during the 121-day period around the ex-dividend date. Your Form 1099-DIV shows the qualified amount in box 1b.
Who pays the Net Investment Income Tax?
People whose modified adjusted gross income is above $200,000 (single or head of household) or $250,000 (married filing jointly). The 3.8 % applies to the smaller of investment income and the amount above the threshold.
Now keep it on track Set the result as a budget in Spendee and see each month how much is left.
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