Long-Term Capital Gains Tax Explained: Rates and Who Pays 0%

Long-term capital gains are profits from investments you have held for more than a year, and the IRS taxes them at lower rates than ordinary income: 0%, 15%, or 20% depending on your total income. In this episode, Ryan explains how these rates differ from short-term gains (taxed as regular income), and uses an oil-and-water analogy to show how long-term gains stack on top of your earned income when calculating what rate applies.Important context: this only applies to taxable brokerage accounts. Gains inside a Roth IRA are tax-free, and gains inside a traditional IRA or 401(k) get taxed as ordinary income when withdrawn. Ryan also notes that many middle-income earners qualify for the 0% long-term capital gains rate, which is a meaningful planning opportunity. This is education, not personal advice; consult a tax professional about your specific situation.Find "Your Fiscal Physical" the book on AmazonIf you have suggestions or feedback, please email us at: [email protected], as always, Stay the Course!