After-Tax Stock & Investment Income Calculator

Short-Term vs Long-Term Capital Gains: Why It Matters

When you sell stocks or other investments for a profit, the IRS treats that gain differently depending on how long you held the asset. Short-term capital gains apply to assets held one year or less. They are taxed at your ordinary income tax rates—the same brackets that apply to your salary, bonus, and interest income. That means federal rates from 10% up to 37%, plus state income tax where it applies.

Long-term capital gains apply to assets held more than one year. The federal government taxes these at preferential rates: 0%, 15%, or 20% depending on your taxable income. Most states that impose an income tax also tax long-term gains, but at the same rate as other income—there is no separate state “long-term” rate. The result: holding for more than a year usually means a lower tax bill and a higher after-tax profit. Use the calculator above to toggle short-term vs long-term and see the difference for your numbers.

Federal vs State Capital Gains Taxes

Federal capital gains tax is either at your ordinary bracket (short-term) or at 0%, 15%, or 20% (long-term). Your state may add more. States that have an income tax generally treat capital gains as taxable income, so your state rate (flat or top marginal rate) applies. Select your state in the calculator above to include state tax in your after-tax stock profit and in the capital gains vs salary comparison.

Capital Gains Tax by State

Whether you owe state tax on stock profits depends on where you live. The following lists match the calculator: choose your state in the tool to see your exact after-tax result.

Why Capital Gains Tax Differs From Salary Tax

Salary, wages, bonuses, and short-term investment gains are all ordinary income. They push you through the same federal brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%) and are subject to FICA on wages and to state tax. Long-term capital gains (and qualified dividends) are given preferential federal rates to encourage long-term investing. So the same dollar amount can produce very different take-home amounts: taxed as salary at 22% federal plus 5% state, you keep less than if that same profit were taxed as long-term gain at 15% federal plus 5% state. The “Capital Gains vs Salary Comparison” tool above lets you enter a profit amount and see the take-home difference side by side. High earners (single over $200k, joint over $250k) may also owe the Net Investment Income Tax (NIIT) of 3.8% on investment income such as capital gains and dividends; this calculator does not include NIIT.

Example: $10,000 Stock Sale Scenario

Suppose you sell shares for a $10,000 profit. If that gain is short-term and you are in the 22% federal bracket in a state with 5% income tax, you would owe about $2,200 federal plus $500 state (27% combined), leaving about $7,300 after tax. If the same $10,000 is long-term and you are in the 15% long-term bracket with the same 5% state, you would owe about $1,500 federal plus $500 state (20% combined), leaving about $8,000 after tax—roughly $700 more in your pocket just from the holding period. Use the after-tax stock profit calculator with your own buy/sell price, shares, and state to get your exact numbers.

Example: Dividend Income Taxation

Dividend income can be taxed as qualified (long-term capital gains rates: 0%, 15%, or 20%) or non-qualified (ordinary income rates). For a simple estimate, the dividend calculator on this page assumes ordinary income treatment so you see a conservative after-tax result. If you have $100,000 invested and receive a 3.5% dividend yield, that is $3,500 per year. At a 22% federal bracket and 5% state, tax would be about $945, for a net annual dividend of about $2,555. Qualified dividends would often be taxed at 15% federal (plus state), increasing your net. Check your broker statements and tax forms for how your dividends are classified.

Related Tools for Your Paycheck and Investments

To see how salary and withholdings affect your take-home pay, use our paycheck calculator for federal and state tax by state. For retirement contributions and employer match, try the 401(k) calculator. To estimate tax on a bonus or supplemental pay, use the bonus tax calculator. If you receive RSUs or other equity, the RSU calculator helps with vesting and tax. For a broader view of investment gains across countries and asset types, see our capital gains tax calculator.

Frequently Asked Questions

References & official sources

Tax rates and rules in this calculator are based on the following official sources. Use them for authoritative guidance and current-year updates.

• IRS Topic 409 – Capital Gains and Losses
• IRS Topic 404 – Dividends
• IRS – Net Investment Income Tax (NIIT)
• IRS – Federal Income Tax Rates and Brackets
• IRS Publication 544 – Sales and Other Dispositions of Assets
• State income and capital gains tax: see your state’s department of revenue or tax agency (e.g. California FTB, New York State Tax).