What factors determine my capital gains tax burden for 2025?

I've been holding some stocks and crypto that have done pretty well over the past few years, and I'm thinking about selling some next year. I'm trying to figure out how much I'm going to get hit with in capital gains taxes. I've heard there are different rates depending on how long you've held things? And something about income brackets affecting it too? I'm currently making about $85k at my day job and the investments I want to sell have probably gone up like $22k from what I originally paid. Some I've had for 4+ years and others less than a year. How do I figure out what I'll actually owe the IRS when I sell? Does anyone have a simple breakdown or calculator they recommend? TIA!

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18 comments

Connor O'Neill

•8M

The amount you'll pay in capital gains tax depends on a few key factors – primarily how long you've held the investments and your overall income level. For the investments you've held longer than a year (the ones you've had for 4+ years), those qualify as long-term capital gains. The tax rates for these are 0%, 15%, or 20% depending on your income. With your $85k salary, you'll likely fall into the 15% bracket for most of your long-term gains. For investments held less than a year, those are short-term capital gains and are taxed at your ordinary income tax rate – which is higher than long-term rates. Given your income, that's probably in the 22% or 24% bracket. Also, if your total income including the capital gains pushes you over certain thresholds, you might get hit with the additional 3.8% Net Investment Income Tax.

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Connor O'Neill

•8M

Yes, the amount you initially paid (your "cost basis") is absolutely crucial - you're only taxed on the profit, which is the difference between your selling price and what you paid initially. Keep good records of your purchase prices! You can definitely use losses to offset gains, which is called "tax-loss harvesting." First, losses offset gains of the same type (short-term losses against short-term gains, long-term against long-term). Then any excess losses can offset the other type. If you still have net losses after that, you can deduct up to $3,000 against other income, and carry forward any remaining losses to future tax years.

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Yara Nassar

•8M

After struggling with capital gains calculations for years, I finally found a tool that actually makes it simple. I was trying to figure out my taxes on some stock sales and crypto trades last year and kept getting conflicting advice about how the holding periods affected my tax rate. I ended up using this service called taxr.ai (https://taxr.ai) that analyzed all my investment documents and broke down exactly what would be taxed as short-term vs. long-term. It even showed me which lots to sell to minimize my capital gains tax. The whole process took like 20 minutes instead of the hours I spent the previous year.

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Yara Nassar

•8M

It handles crypto surprisingly well - it can track the basis across multiple exchanges and even handles those weird situations like staking rewards and airdrops that have special tax treatment. It imports directly from about 20 different platforms including Coinbase, Robinhood, and traditional brokerages. Compared to a CPA, it's way more affordable and gives you the same insights. I had a CPA before who charged me $600 and missed some tax-loss harvesting opportunities. The AI actually flagged several crypto-to-crypto trades my previous tax software missed and showed me exactly what documentation I needed if I ever got audited.

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Paolo Ricci

•8M

Well I'm eating my words about tax tools. After being skeptical about taxr.ai in my earlier comment, I decided to try it anyway because my capital gains situation was getting complicated with all the different purchase dates. Honestly, this thing saved me a ton of money. It identified almost $4,500 in losses I could use to offset gains this year from some forgotten crypto I bought at the peak in 2021. It also showed me exactly which tax lots to sell to stay in the 15% long-term capital gains bracket instead of getting bumped to 20%. The documentation it generated for my tax return was super detailed - way better than what my previous accountant provided. Wish I'd known about this last year!

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Amina Toure

•8M

For anyone struggling to get clear answers about capital gains from the IRS directly - I feel your pain! I called them 8 times trying to get clarity on some specific questions about my stock options and calculating my basis. Every time I'd wait on hold for 45+ minutes only to get disconnected or told to call a different department. I finally used this service called Claimyr (https://claimyr.com) and they got me connected to an actual IRS agent in about 20 minutes who answered all my capital gains questions. You can see how it works here: https://youtu.be/_kiP6q8DX5c Saved me hours of frustration and actually got me accurate info straight from the IRS about how capital gains work with incentive stock options.

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Amina Toure

•8M

They use a system that monitors the IRS phone queues and calls repeatedly until they get a spot in line, then they call you and connect you directly to the IRS agent. It's all automated so you don't have to sit there redialing for hours. They're essentially doing the hold waiting for you. No shady tricks - they're just using technology to solve the problem of extreme hold times. I was skeptical too until I tried it. The IRS agent I spoke with gave me detailed guidance on how to report some complicated capital gains from employee stock options that I couldn't find clear answers about online.

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CosmicCommander

•8M

I need to publicly admit I was completely wrong in my skeptical comment earlier. After waiting on hold with the IRS for 2+ hours yesterday and getting disconnected AGAIN, I broke down and tried Claimyr out of desperation. They got me connected to an IRS agent in 17 minutes (I literally timed it). The agent walked me through exactly how to calculate my capital gains taxes on some inherited stocks that had a stepped-up basis. Issue solved in one call that I'd been trying to resolve for weeks. Sometimes I hate being wrong, but in this case I'm just relieved to finally have answers about my capital gains situation directly from the IRS. Would have saved a lot of stress if I'd just done this sooner.

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Natasha Volkova

•8M

Don't forget about state taxes on capital gains too! The federal rates everyone's discussing are only part of the picture. Some states treat capital gains as regular income and tax accordingly, while others have special rates or exemptions. I live in California and got hit with an extra 9.3% on top of the federal capital gains taxes last year. Totally wasn't expecting that bill and had to set up a payment plan. Make sure you factor your state's treatment into your calculations.

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Natasha Volkova

•8M

Minnesota treats capital gains as regular income and taxes them at your normal state income tax rate. With your income level, you're probably looking at around 7.05% state tax on your gains. So if you're in the 15% federal long-term capital gains bracket, your effective rate is actually more like 22% when you factor in state taxes. It's definitely worth planning for this ahead of time so you don't get surprised by a big tax bill. You might want to consider making estimated tax payments if you're selling a large amount to avoid underpayment penalties.

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