| Dreamstime.com.
Capital gains taxes don’t work like ordinary income taxes. What matters is which capital gains bracket your Modified Adjusted Gross Income (MAGI) falls into.
And for many people in or near early retirement — single filers earning up to $49,450 or married filers earning up to $98,000 in 2026 — that bracket could be zero.
What does that actually mean for you?
If your total income, including realized capital gains, stays within the 0% capital gains bracket, you may be able to take withdrawals from a taxable brokerage account without owing a single dollar in capital gains tax. That’s a powerful lever for those looking to retire early or manage their income in retirement.
And it gets better. Meet tax-gain harvesting.
Most people have heard of tax-loss harvesting. But tax-gain harvesting is a strategy that doesn’t get nearly enough attention. If you’re in the 0% bracket, you can sell an appreciated investment, realize the gain tax-free (as long as it keeps you within that bracket) and reinvest the proceeds, effectively resetting your cost basis at a higher level without paying capital gains tax. Done strategically year over year, this can reduce your future tax burden.
The flexibility of a taxable brokerage account.
Because you control when you realize gains, a taxable brokerage account gives you the ability to manage your income levels with precision, staying within the 0% bracket year over year with thoughtful planning.
One more opportunity worth knowing.
In years where you’re realizing gains at 0%, you may still have room to layer in partial Roth conversions, moving money from a pretax account to a Roth while keeping your overall tax exposure in check. It’s a strategy that can pay dividends for decades.
The 0% capital gains rate isn’t a loophole. It’s a feature of the tax code that rewards intentional planning.
Ben Soccodato and Chris Kampitsis head The SKG Team at Barnum Financial Group in Elmsford.
