The tax rate on capital gains and dividends remains at zero percent for 2010. You will be allowed to receive dividends and take profit on the sale of long-term assets you’ve owned, and pay no tax until they push you into the 25% tax bracket. To qualify for the zero rate you must have owned the assets over a year and be in the 10% or 15% tax brackets.
For 2010 the 25% tax bracket starts at taxable incomes greater than $67,900 for married filing jointly and $33,950 for single filers. When your taxable income exceeds these amounts your dividends and long-term capital gains will be taxed at 15%. Short-term gains and long-term gains on collectibles do not qualify for these special rates.
For example, suppose you were married filing jointly and all your income was from long-term capital gains. For 2010, you would be pushed into the 25% tax bracket when your income exceeded $67,900. If the only taxable income you had for the year was $65,000 of dividends and long-term capital gains, none of your income would be taxed.
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