0% Long-Term Capital Gain Tax from 2008 to 2010 for Some Investors

The tax season is coming soon and it’s about time to consider some tax strategies as 2008 quickly draws to a conclusion. With stock markets got hammered so badly this year, there are some moves you can make to take advantage of the current situation while preparing yourself for a rebound in the stock markets later (the bad news is nobody knows when that will happen though). Even if  you don’t make any change on how you invest, you may still benefit from from changes in the tax codes this year, depending on your income level. One of the changes in 2008 is some investors will pay 0% tax on long-term capital gains, though this is temporary.

For most investors who are in the 25% or higher tax brackets, they will be paying 15% on long-term capital gains (your profits from selling securities that you held 12 months or longer) and dividend (Bankrate). However, if you are in the 10% and 15% income tax brackets, you will get a nice tax break in 2008 and through 2010: Pay 0% long-term capital gain tax from 2008 to 2010 (USA Today). Currently people in the low income tax brackets pay 5% on long-term capital gain.

To qualify for the zero-percent tax rate, married couple filing joint return must earn a taxable income of $65,000 or less in 2008. For single taxpayer, the income limit is $32,550 or less. Taxable income is the amount of income that is subject to income taxes. It is usually calculated by subtracting your gross or adjusted gross income by any deductions, exemptions, or adjustments.

If you are doing your own taxes, keep this on your mind. It can save your a few bucks

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