NEW! - Can Capital Gains Push Me Into a Higher Tax Bracket?

[@TedErhartCFP]

Check out the related video 👉 How capital gains affect taxes on Social Security: kzbin.info/www/bejne/jmOuanhqqbClnLMsi=Ay9Rg0TlJ79eqVTC

[@devisubramaniam3860]

Thank you, my mother a recent widow was surprised on her tax bill, and I can understand why now, in addition to the standard deductions.. She has an accountant who does her taxes, so she is paying the correct amount, just that her bill was a surprise.

[@bill7320]

Add me to the list of people saying that this is the clearest explanation on KZbin! Presenting ordinary income and capital gains side-by-side made it easy to follow. I also appreciated the detailed presentation of how the long-term capital gains stack on top of ordinary income. Actually, both qualified dividends and long-term capital gains stack on top of ordinary income, but I recognize that you might confuse part of your audience by trying to clarify that. My only disappointment was noticing that only 4,700 people viewed the video. You deserve a much wider audience! Liked and subscribed.

[@TedErhartCFP]

Really glad it was helpful and I appreciate the nice comment! 😀

[@Thesakuraharona]

I really needed this video since I am starting my own financial education into investments. Clarified my confusion nicely

[@mikeymike202]

The two graphics showing how ordinary is first and LT gain is ON TOP OF ordinary combined with the LT floor and blended rates are golden! It's very tedious to go through that on my turbotax worksheet. Thanks for explaining this is the perfect level of detail.

[@kansaidan2302]

You're a great teacher! I will be subject to Capital Gains soon and it's good to know exactly how they work. Will help me to calculate how much I can SELL. I'm also a retiree, so I need to keep Social Security and IRMAA in mind. At least if I seek out a TAX professional I'll be somewhat informed. Thank you!

[@TedErhartCFP]

Glad it was helpful!

[@Travlinmo]

Agree, great video. My remaining question (and something I haven’t googled!) is for large sales of stocks, should I be doing an estimated tax to the IRS at time of sale? (I have never sold meaningful $ after tax)

[@RBart-os6sy]

The best explanation I found on YT. Thanks! I just subscribed.

[@DADVICETV]

By far the best explanation of this I have ever seen!

[@TedErhartCFP]

Thanks! Glad it was helpful.

[@AddilynTuffin]

Increasing tax rates are the reason I rolled over my 401k to a Roth. I don’t want to be 59 paying taxes on current income on withdrawals made from my retirement account. I'm now seeking best possible areas or strategy to keep my retirement contributions on track to my $5m goal.

[@PauleAraiza]

Pre-tax contributions may help reduce income taxes in your pre-retirement years while after-tax contributions may help reduce your income tax burden during retirement.

[@eile4219]

Move to Roth means those will taxes at a higher rate now 😂

[@andrewrivera4029]

Great job saving now just make sure you get healthy and continue to stay healthy so you can enjoy that nest egg!

[@brianm5448]

@@eile4219 Unless some of that money is invested in oil and gas funds to offset regular income.

[@TerryStoa]

Terrific explanations. I’ve been good at tax PREPARATION, but am just recently learning the value of tax PLANNING.

[@mhub3576]

You're right it is technical, but you did a great job simplifying it. Top notch presentation, Ted!

[@TedErhartCFP]

I appreciate that!

[@johndherman75]

Excellent presentation! The charts helped me finally to understand how capital gains get stacked on top of ordinary income...after 40 some years of filing taxes! Thanks!

[@wren6o]

I agree. 👍

[@skyak4493]

THANK YOU! This is exactly the questions and answers I need. I have been harvesting LT cap losses so long that now I only have a few years to harvest gains before pension, SS, and RMDs kick in and raise my bracket.

[@MichaelSmith-if2rs]

very good explanation, especially the stacking graph. I have heard of this, but never truly understood it, this was really helpful. Thank you!

[@tomn5413]

Awesome video ... short and sweet. I am looking forward to see more video relate to Capital gains and IRMMA tax. Thanks

[@michaelshultz9923]

kzbin.info/www/bejne/d5qXcn6hfcesiqM. Mr. Erhart also points out that tax-exempt income is included in the IRMAA surcharge.

[@andrehorochiwsky3627]

I thought I understood income, standard deduction, LT capital gains calculations well. I was close, but missed a few key points. Thanks, very helpful.

[@notyetjp]

Being a great TEACHER is completely separate from being a financial expert. I finally understand this clearly! Your charts are the best on YT. Stellar work.

[@robannmateja5000]

This was the best discussion of this topic that I've seen (and I've watched and read about this extensively). Thank you so much!

[@mikeamato2830]

Finally, someone clarifies this for me. Thank you so much!! Subscribed!

[@stephenvivien4197]

THANK YOU. Been trying to figure this out for 5 years, accountant could not explain it, YOU DID ! Thank you.

[@teddybean9948]

Best explanation of taxable incomes for salary and capital gains. You convinced me to hit that subscribed button.

[@kineticU]

Very well presented. Concise and clear. Thank you

[@PhilSallaway]

I have had many "Experts" explain this and it was clear as mud. Your explanation and Charts are Super Clear and to the point Thanks Great Job.

[@TedErhartCFP]

Glad it was helpful!

[@freecycling6687]

Ditto everyone else! This was a clear concise explanation of this topic, which I've never quite understood (what with using Turbo Tax, which doesn't really explain anything it's doing.) But within 10 minutes you explained this in a way that was easy to understand and to remember.

[@boatsie]

I watched LOTS of videos about this subject and always came away feeling I was missing something. This was the first video that cleared up a lot of my questions & concerns about this subject. Thank you so much for your time & effort…I now understand 👍 Qualified dividends also fall into that ”Capitol Gains” bracket bucket as well…right?

[@Random-ld6wg]

i have explained this to my wife every time i do a quarterly estimated tax payment but your nice side by side chart hopefully makes it easy for her to understand. in early retirement my "income" subject to marignal rates is only from roth conversions and we live off liquidations from my taxable brokerage. i was planning on buying some rectangular magnets of different colors to use on a whiteboard along with the different tax brackets to show how the income stacking is in our particular situtaion.

[@Jupiterplus]

This is the best video that I have seen explaining the correlation between ordinary income/capital gains and how they influence each👍👍 Very nice and educational! Going to share it with my friends.😊

[@TedErhartCFP]

Glad it was helpful!

[@javanparx6626]

Thanks for the info! Taking on the CFP in 2025 and your channel has some great simplified content for me to go over. Appreciate your time and effort!

[@wrobinnes]

I actually recreated the 1040 including that line 16 worksheet in Excel to figure out how my capital gains and regular income is taxed - I reverse engineered it - and figured out much of what you presented here, but your explanation still clarified a lot. Thanks! We’re still in our 50s, and my strategy is to realize as much capital gains as I can each year, while remaining in that 0% bucket.

[@Brian-Gigi]

That was awesome Ted! Simple and clear, thank you!

[@michaelgreskamp1093]

Ted - First time I caught one of your videos. Well done laying out the camptal gains brackets. I was able to jetason some stock options over the years at 0% when I retired at 60 ten yerears ago. Frankly - I educated myself and qualified for the 0% bracket keeping my totals under the IRMAA threshold. Again - excellent presentation!

[@TedErhartCFP]

Awesome! Glad the video was helful. 😀

[@cq7415]

Very good. I was wrong in thinking that the capital gains were taxed differently until he explained it clearly with his illustrations. Now I understand. Thank you for sharing.

[@devisubramaniam3860]

Thank you so much, the bar charts made it so clear. I just subscribed.

[@hm51008]

Outstanding presentation… the best example I have seen yet on KZbin.

[@itchyisvegeta]

Im in my 40s, not even retired yet, and this is one of the best videos ive seen explaining this stuff.

[@TedErhartCFP]

Awesome! Glad it was helpful.

[@gemmaanderson4430]

Thankyou! For explaining this so clearly. Ive been going in circles trying to get a clear answer from google sources on this.

[@timw491]

Thanks - that was very helpful. The examples with charts helped tremendously. Previously could not understand what others meant by gains being "stacked on top". Would really appreciate it if you would do another similar episode on qualified, non-qualified dividends, and interest income and its effect on tax brackets. I think I know the answer from watching this, but confirmation would really be helpful. Thanks very much for your efforts.

[@Mark-ow6xr]

You did an Amazing job of explaining taxation and the different income buckets. Because of your clear explanation I am going to change my 3 different accounts around to take advantage of the taxes (asset location). Thank you for your expertise.

[@ramblingGuy]

Thank you! This is the first explanation that actually makes sense. That tax rate stacking visual really helped!

[@georgestreng]

You made that perfectly clear.

[@lpac8272]

Super helpful, planning on retiring at 52 using my RSUs to fund my retirement until I can draw from 401k. I had some holes in my understanding of how the LT capital gains was taxed and your charts and explanation filled those holes. Thanks!

[@nadmeldev]

Hands down best video I have ever watched explaining these numbers. I'm a fan! Thank you Sir!

[@TedErhartCFP]

Wow, thanks!

[@weldo1948]

Excellent presentation. Clarity is great, especially for us older folks already retired and on Medicaid.

[@TedErhartCFP]

Glad it was helpful!

[@satchitbliss5411]

Most useful information relevant to my life I found on KZbin. The way you explained cannot be any better. My respectful sincere thanks.

[@williamthone9678]

Really clear!

[@driveamericanroads7491]

Excellent review of a complex topic

[@kerripace]

Nice job! Thank you!

[@jason9787]

Just subscribed! It was not only just clear, but was well story boarded!!

[@chiuhuili293]

Excellent and clear explanation! Thank you so much.

[@ykc6006]

Great video! Amazing teacher! Can you please do another example adding dividend income? Thank you!

[@RP-16]

The more I learn about taxes the more I realize our taxes are actually kinda low. Atleast for people with large investing accounts

[@todddunn945]

Good explanation and nice to see someone actually show the capitol gains and qualified dividends worksheet.

[@mrprfct7069]

Best video showing capital gains breakdown

[@DYI]

Good job. The biggest tax surprise you didn't mention is in states like California that don't have a Long Term Capital Gains rate. The high CA income tax rates apply to Long Term Gains so your State tax can exceed your Federal tax in some cases.

[@jamesbennett5421]

Very helpful… thanks. And here I was excited that the first 90K of gains wasn’t taxable, but you need 0 ordinary income for that to be true. :(

[@TedErhartCFP]

Don't forget about your standard deduction. Basically as long as your other sources of income are equal to, or below your standard deduction (or itemized deductions), you can maximize the 0% long-term capital gain bracket. I've got another video in the works on this.

[@LiveWithStocks]

Great contents!! Thank you for delivering the point easily. It looks quite basic but I didn’t have a good insight before.

[@boomergames8094]

Thank you. This chart/graph is really, really helpful.

[@11rammi]

Excellent video, you made the complex stuff so simple ❤

[@unearnedinc]

If you don’t ever make another video you’ve still gained a new subscriber. Great explanation.

[@TedErhartCFP]

Awesome, thank you!

[@zeitgeist888]

Super informative and concise with great real world examples. Thank you

[@mikeg9b]

Thank you for the very clear explanation. I've been adding to my mutual fund positions for 20+ years, but have never sold until this week. Now I have a better idea of what to expect when I filed my tax return next April.

[@SRTendulkar999]

Nice video. Finally I get the concept. Thanks

[@DinoTamer23]

Thanks for video. Would love to see a similar one on short term capital gains

[@notyetjp]

Short term gains are all taxed as ordinary income up thru your brackets. It can get brutal if you are really "lucky".

[@richard9827]

Excellent. Thank you I’m going to look to see if you have any videos discussing IRMAA

[@RamTrucks590]

Great job explaining this. I'm getting ready to retire in five years and believe tax planning is just as important as investing.

[@TedErhartCFP]

I would agree. With investing, chance plays a major role. By contrast, retirees can often be very strategic with the amount of income that hits their tax return.

[@macroberlitz]

Very helpful video - thank you for addressing this confusing topic with such clarity

[@SurfCityBill]

Very well done. This is going to help me next year. I plan to sell stock with a zero cost basis and my plan is to be in the 0% cap gains rate range.

[@SDFlagg]

Excellent video sir! Do you mind making on on short term capital gains. Similar to this video?

[@chayden1402]

Wow in glad I stumbled on your channel...thanks!!, great advice

[@Sam-tg4ii]

7:36 awesome visualization and very clear. Thank you

[@sammytwosocks9147]

Thank you very much!! This is a great video, very easy to understand. I use on-line tax forms. I'm guessing they take all the particulars into calculation, as long as I enter correctly?

[@Wrighjj]

I created my own "Qualified Dividends and Capital Gains Tax Worksheet" as an Excel file to help me plan. That was an effort. This excellent video would have been more useful for me if it had been available several years ago.

[@michaelshultz9923]

I've done this too. I still run the figures both ways, but it's easy to make an error on the QDCGTW, so the Excel file is a good way to double check.

[@dancarney106]

Great graphics. You stayed on point. I was attentive. I subscribed. Thank you.

[@ralphwaters8905]

Very nice simplified explanation, and the graphics illustrated it perfectly. I have a friend with a regular taxable investment portfolio whose only other income source is Social Security. They currently have this portfolio "professionally" managed (1% fee), so they see a large number of taxable events each year, many of which are short term gains or unqualified dividends. This has pushed all their SS income into a taxable bracket, with disastrous results. I've been gently pushing them to switch to a self-managed portfolio with ETFs (such as VOO or IVV), so that we can control their income by what they sell, and tune it to avoid this tax torpedo as well as getting 0% taxation on gains. Can you comment on my strategy?

[@Random-ld6wg]

i just figured my quarterly estimated tax for the 3rd quarter and went over the figures with my wife. afterwards, i had her watch your video. i think she is starting to get it. i paid it online this morning.

[@lancepayne7528]

All of your information is VERY HELPFUL !!!! Thank you!!!!

[@mylifeonthebeach]

Very good explanation of the topic and presented clearly!

[@michaelnoonan7832]

This is the easiest to understand explanation i have seen. Thank you

[@johnyang962]

Thank you for the clear explanations, this is the best explanations I've ever seen for this confusing but important tax topic for everyone.

[@TedErhartCFP]

Glad it was helpful!

[@davidolee1]

Well explained and very clear illustrations. Thanks.

[@Satjr35031]

Well explained. Just keep it simple to get your point across.

[@jkopvo]

Thanks for the video. I never really understood how ordinary income & capital gains (& qualified dividend) income interacted. I have been doing some Roth conversions and have noticed, however, that as long as I have enough (standard or itemized) deductions to cover my Roth conversions (and other ordinary income), then I have the full 0% bracket available for capital gains and qualified dividends. This seems to line up with what you explained.

[@MICHAELCARACAPPAJR]

This IS the explanation I’ve been looking for!! THANK YOU!

[@denwoz7788]

Fantastic explanation! Thank you for helping me understand this better.

[@ReesRetuta]

great video! super useful illustrations

[@shablinsky3277]

This was very helpful, thanks Ted. I plan to liquidate securities to buy retirement real estate, and will take considerable capital gains in the process. Now I know how to roughly estimate the tax impact. Liked and subscribed.

[@TedErhartCFP]

Glad it was helpful!

[@samkapoor3441]

Great points. In the same vain, one can become ineligible for IRA contribution as long term capital gains can put one over the MAGI limit of IRA contributions. Like you said, many people find this out only when they are ready to file taxes and then they have to request return of those contributions in time. Otherwise there is a 6% penalty each year on excess contributions.

[@adamfrost9048]

Really great explanation that makes everything crystal clear.

[@TedErhartCFP]

Awesome! Glad it was helpful.

[@fialee8ca132]

Nice summary and visuals!

[@brettm8970]

Nice job. 😊

[@KhemistryIBMOR]

Great video! Thank you for the instruction!

[@CrabbyE8]

This is great stuff! I have been looking for this exact explanation. 🎉

[@charlesfrench9557]

Hello and thanks for the tax examples. Next time could you cover a first year of retirement example with some wages, some taxable pension, some inherited ira withdrawal, some qualified dividend, some tax loss selling, and some unqualified dividends, all totaling about 200k. Thanks again!

[@markmyjak7739]

I'm building a stock portfolio that pays dividends. The plan is to live of the dividends and not have to collect SS. I don't like the idea of the strings attached to SS.

[@MyWasteOfTime]

How is LTCG affected with SS income?

[@CrystalConsults]

Very well explained! Love the viz aids. 👍

[@Rajulio78]

Well done, sir!👏👏👏

[@AndrewNovick]

This is great and answered a question that I've had for a long time. Would you please do a video on how short-term cap gains/losses interact with the long-term cap gains/losses. Can short-term losses offset long-term gains? That would be great. I can do some tax loss harvesting if that's the case. Are the short-term gains, just ordinary income? And how does this play with the info in this video? Another topic: Qualified Dividends, How do they interact with this info. Are they just treated as long-term cap gains, or something else. Thanks for this channel.

[@mikeho1871]

Best video!! Clear explanation thank you so much. Subscribe immediately

[@kyledurning]

It will get even better. How will this all work when the average worker cannot read? Have you seen the way they try to do multiplication? The government is going to have to dumb it down to flat% so it will be understandable.

[@Thesakuraharona]

While I do not necessary disagree, it does seem unfair to blame that exclusively and suggest people are just dumb. Financial education is severely lacking in the United States in general, and most people have to figure it out for themselves. Many individuals grow up poor and remain poor for various reasons as well. I am not surprised people do not understand this. I didn't either in the beginning. At least people are asking and trying to learn.

[@johnbeeck2540]

Great explanation for simple capital gains - what about selling primary residence - how is the tax on the gain applied - is there not a capital gains credit of $250K per husband and also wife? How does that work with your example... Thanks!

[@Erikkurilla01]

I converted my 401k to a Roth IRA to avoid higher taxes in the future. I'd rather pay taxes now than be stuck paying taxes on my retirement income when I'm 59 and living off my savings.

[@bahijarhafiri]

Pre-tax contributions may help reduce income taxes in your pre-retirement years while after-tax contributions may help reduce your income tax burden during retirement.

[@KentBrono]

Both have their perks but you can also save for retirement outside of a retirement plan, such as an individual investment account or employing the services of a retirement planner/financial Advisor.

[@jessicasquire]

How can one find a verifiable financial planner? I would not mind looking up the professional that helped you

[@KentBrono]

My CFA Julianne Iwersen Niemann, a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.

[@jessicasquire]

Found her online page by searching her full name, I wrote her an email and scheduled a call, hopefully she responds.

[@thegefster1988]

Ted, Thank you for this. Very helpful! I live in CA and understand (not sure if correctly) that both short term and long term are considered the same as income. So do you basically just add everything together to determine your tax bracket in that case? Thanks... No wonder we all want to leave lol