Biden's Budget Proposal: Higher Taxes for High Earners
Impact on Taxpayers Making $400,000 or More
Under President Biden's proposed budget for fiscal year 2024, taxpayers with taxable income exceeding $400,000 would face a top marginal income tax rate of 39.6%. This represents an increase from the current top rate of 37%.
Capital Gains Tax Rates for 2023 and 2024
The capital gains tax is levied on profits realized from the sale of assets such as stocks, bonds, and real estate. For long-term capital gains (assets held for more than one year), there are three tax rates:
- 0% for taxpayers in the lowest income tax brackets
- 15% for taxpayers in the middle and upper-middle income tax brackets
- 20% for taxpayers in the highest income tax brackets
These rates apply to both the 2023 and 2024 tax years.
Calculating Capital Gains Tax
To calculate your capital gains tax, you need to determine the difference between the proceeds from the sale of the asset and your cost basis, which includes the purchase price and any improvements or expenses incurred during the time you owned the asset.
Once you have calculated your capital gain, you can apply the appropriate tax rate based on your income level and the holding period of the asset.
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