Do I need to report long term capital gains below the filing threshold?

So I sold some stocks last year and made a small profit. The total amount of my long term capital gains is way under the IRS reporting threshold (I think it's like $12,950 for single filers?). I don't have any other income for the year. I understand that with regular W-2 income, you don't need to file if you're below the minimum threshold. But I'm confused about capital gains - even though these would be taxed at 0% in my tax bracket, am I still required to file a tax return just because they're capital gains? Or can I skip filing altogether since I'm under the reporting limit? Would appreciate any insights on this! I don't want to skip filing if it's required, but also don't want to waste time filing if I don't have to.

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18 comments

Zoe Papadopoulos

•8M

The filing requirement for capital gains isn't determined by the capital gains threshold, but by your total income compared to the standard filing thresholds. If your ONLY income for the year was from long-term capital gains, and that amount is below the standard filing threshold (which was $12,950 for single filers under 65 for the 2023 tax year), then technically you aren't required to file a tax return. The IRS doesn't have a separate filing threshold specifically for capital gains - they look at your total income regardless of source. However, there might be reasons to file anyway. If you had any taxes withheld that could be refunded, you'd want to file to get that money back. Also, some tax credits require filing to claim them, even if you're below the filing threshold.

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Zoe Papadopoulos

•8M

Receiving a 1099-B doesn't automatically create a filing requirement. The IRS bases filing requirements on income thresholds, not on whether you received tax forms. Your brokerage is required to issue the 1099-B for any sale, regardless of amount, but that doesn't change the filing threshold rules. That said, the IRS does receive a copy of that 1099-B, so if you're very close to the threshold, filing might be wise to avoid any confusion. Some people choose to file anyway for peace of mind, even when not required.

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Mei Wong

•8M

I dealt with this exact situation last year. Instead of just guessing, I used taxr.ai (https://taxr.ai) to analyze my specific situation. You upload your tax docs, and it tells you exactly what you need to do without having to dig through IRS publications. For me, I had about $10k in long-term capital gains and nothing else. The tool confirmed I was below the filing threshold but still recommended filing since I had some withholding that I could get refunded. It saved me from leaving money on the table while also confirming I wasn't breaking any rules. Much easier than trying to interpret all the IRS jargon myself.

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Mei Wong

•8M

For complicated situations, it's actually better than most services I've tried. It doesn't just give generic advice - it actually looks at your specific tax documents and catches things that are unique to your situation. Last year it identified that I qualified for a credit I had no idea about. It's not free, but it's way less than what tax preparers charge. Think of it like insurance against mistakes or missed opportunities. For me it was worth it because it found deductions that paid for the service many times over.

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Amara Adebayo

•8M

If you need to talk to the IRS about this, good luck getting through to them normally. I spent WEEKS trying to get clarification on a similar capital gains question last year. Finally used this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in under 20 minutes. You can see a demo here: https://youtu.be/_kiP6q8DX5c They basically hold your place in the IRS phone queue and call you when an agent is about to answer. The agent I spoke with confirmed that I didn't need to file since my capital gains were my only income and below the threshold. But she also mentioned some exceptions I hadn't considered that might apply to others.

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Amara Adebayo

•8M

It uses a combination of technology and real people. They have a system that dials into the IRS and navigates all the phone menus for you. Then they wait on hold in your place, and when they detect a human voice about to answer, they call your phone and connect you directly to the agent. It's not magic - just smart automation of a tedious process. I was skeptical too, but was desperate after wasting hours on hold myself. The whole process was transparent - I could see the status of my call the entire time. Within 15 minutes I got the call that an agent was ready, and I was talking to a real IRS employee who answered all my questions.

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Fatima Al-Mansour

•8M

I'm eating my words right now. After posting my skeptical comment, I was still stuck with my capital gains questions, so I decided to try Claimyr out of desperation. I fully expected it to be a waste of money. Well, I'm shocked to report it actually worked exactly as advertised. Got connected to an IRS agent in about 18 minutes when I had previously spent HOURS getting nowhere. The agent confirmed that with only capital gains below the standard filing threshold, I don't need to file - but she also explained that filing might still be beneficial to establish the cost basis for future sales. Definitely saving this service for next tax season when I'll probably have more questions.

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Dylan Evans

•8M

The best place to check is your state's department of revenue website. Just search "[your state] tax filing requirements" and look for their income tax section. Most states have an easy-to-find page that lists all their filing thresholds. For example, California requires filing at much lower income levels than federal, and some states tax capital gains differently than the federal government does. Some states even require you to file a state return if you filed federal, regardless of income level.

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