Short-Term Capital Gains Tax Calculator 2025
Calculate federal income tax on short-term capital gains (assets held 1 year or less). Compare with long-term rates and see the break-even holding period.
$
Profit from assets held 1 year or less $
After adjustments, before standard deduction $
$0
Short-Term Tax (Ordinary Rate)
$0
Long-Term Tax (If Held 1+ Year)
$0
Tax Saving by Holding Longer
0%
Your Marginal Rate
Tax Rate Comparison
How to Use This Short-Term Capital Gains Calculator
Enter your short-term capital gain (profit from selling an asset held 1 year or less) and your ordinary income for the year. The standard deduction is applied automatically. The calculator shows your tax at ordinary income rates compared to what you would pay if the asset qualified for long-term capital gains rates.
Short-term gains are added on top of your ordinary income and taxed at your highest marginal rate.
The Formula
Net Short-Term Gain = Gain β Short-Term Losses
Taxable Income = Ordinary Income + Net Short-Term Gain β Standard Deduction
Short-Term Tax = Apply federal brackets to marginal income from gain
Long-Term Rate = 0% / 15% / 20% based on total income
Long-Term Tax = Net Gain Γ Long-Term Rate
Tax Saving = Short-Term Tax β Long-Term Tax
Taxable Income = Ordinary Income + Net Short-Term Gain β Standard Deduction
Short-Term Tax = Apply federal brackets to marginal income from gain
Long-Term Rate = 0% / 15% / 20% based on total income
Long-Term Tax = Net Gain Γ Long-Term Rate
Tax Saving = Short-Term Tax β Long-Term Tax
Example
Chris, single, $75,000 W-2 income, $25,000 short-term gain in 2025:
Standard deduction: $15,000
Taxable income: ($75,000 + $25,000) β $15,000 = $85,000
Marginal rate on gain: 22%
Short-term federal tax on gain: $25,000 Γ 22% = $5,500
Long-term rate at this income: 15%
Long-term tax would be: $25,000 Γ 15% = $3,750
Saving by holding 1+ year: $1,750
Standard deduction: $15,000
Taxable income: ($75,000 + $25,000) β $15,000 = $85,000
Marginal rate on gain: 22%
Short-term federal tax on gain: $25,000 Γ 22% = $5,500
Long-term rate at this income: 15%
Long-term tax would be: $25,000 Γ 15% = $3,750
Saving by holding 1+ year: $1,750
Extended
Short-Term vs Long-Term Holding Comparison
See the exact tax difference and break-even holding period analysis
Detailed comparison showing how much you save by holding investments to qualify for long-term capital gains treatment.
| Capital Gain | Short-Term Tax | Long-Term Tax | Tax Saving | Saving as % of Gain |
|---|
2025 Federal Capital Gains Rate Comparison
| Tax Bracket | Ordinary Income Rate | Long-Term CG Rate | Difference |
|---|---|---|---|
| Lowest bracket | 10% | 0% | 10 pts |
| 12% | 12% | 0% | 12 pts |
| 22% | 22% | 15% | 7 pts |
| 24% | 24% | 15% | 9 pts |
| 32% | 32% | 15% | 17 pts |
| 35% | 35% | 20% | 15 pts |
| 37% (top) | 37% | 20% | 17 pts |
| 37% + NIIT | 40.8% | 23.8% | 17 pts |
Frequently Asked Questions
What is the difference between short-term and long-term capital gains?
Short-term capital gains are profits from assets held for 1 year or less. They are taxed as ordinary income at your regular federal income tax rate (10%β37%). Long-term capital gains are profits from assets held for more than 1 year. They are taxed at preferential rates of 0%, 15%, or 20% depending on your income. This difference can be significant β for example, a 24% short-term rate vs. 15% long-term rate on a $50,000 gain saves $4,500 in federal tax.
Are short-term capital gains subject to the Net Investment Income Tax (NIIT)?
Yes. If your Modified Adjusted Gross Income (MAGI) exceeds $200,000 (single) or $250,000 (married filing jointly), an additional 3.8% Net Investment Income Tax (NIIT) applies to investment income including short-term capital gains. This brings the maximum effective rate on short-term gains to 40.8% (37% + 3.8%).
Can I offset short-term capital gains with long-term losses?
Yes. Capital gains and losses are netted together. Short-term gains are first offset by short-term losses. Long-term gains are first offset by long-term losses. If after netting you have short-term gains and long-term losses (or vice versa), the remaining amounts can offset each other. Any net capital loss up to $3,000 can be deducted against ordinary income; excess losses carry forward.
Does holding an investment one extra day to qualify for long-term rates make sense?
In most cases yes, if the investment has unrealised gains and you are close to the 1-year mark. The difference in rates can be substantial β for a taxpayer in the 32% bracket, gaining long-term treatment saves 17 percentage points (32% vs. 15%). However, you should weigh this against the risk of holding: if the asset could decline in value, the tax saving might be outweighed by the potential loss.
Are short-term capital gains taxed differently by states?
Most states do not distinguish between short-term and long-term capital gains β they tax all capital gains as ordinary income at the state rate. A few states (like California and Oregon) have some of the highest state income tax rates in the country, significantly adding to the combined federal + state tax on short-term gains. A few states have no income tax at all (Florida, Texas, Nevada, etc.).