Do you pay taxes on capital gains in Florida?
Capital gain is a concept within economics that describes the profit that is made after a sale of an investment or an asset. Assets that can provide capital gain include properties, cars, stock and even businesses.
Some states have required that people pay taxes for capital gains. This usually applies to sales of assets held for longer than one full year, which are called long-term capital gains. These assets that provide long-term capital gains usually look like real estate and stocks. Some assets are withheld from the capital gains taxes requirement. These include but are not limited to government-owned properties and some agricultural lands.
Capital gains taxes can vary according to state legislation, so it’s important to understand the laws where you live. Financial planners and wealth managers are typically very knowledgeable about this type of tax because it falls into the scope of tax planning. If you live in a state where capital gains taxes aren’t required, like Florida, financial planners can still be helpful resources for getting to know federal tax requirements.
So, what taxes do Floridians have to pay on their capital gains?
- State-level capital gains tax — You might be interested to know that there actually isn’t any state-level capital gains tax in Florida. If you make money from selling an asset, you aren’t responsible for paying taxes on it to the state.
- Federal-level capital gains tax — Despite the absence of capital gains tax required by the state, Floridians are still subject to federal taxes. The amount of taxes you’re responsible for paying can depend on whether the profit comes from a short-term or long-term asset. Federal tax bracket percentages range from 0% to 15% to 20% for long-term capital gains, which are assets sold more than one year after buying. For certain high-income individuals, there could also be a 3.8% surtax added onto the capital gains rate.
How can a CFP® professional reduce your tax liability?
CERTIFIED FINANCIAL PLANNER™ professionals can be a great resource for reducing your tax liability. They know how capital gains and losses work as well as several different kinds of tax breaks that you might not know of. If you’re a new investor, financial planners can inform you on how transactions will be taxed and how you can avoid becoming liable for more than necessary.
Talk to a ProVise CFP® professional about your capital gains tax in Florida
At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance, and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.
Are you ready to talk to a professional about capital gains tax and how it affects you? Contact ProVise today to schedule a complimentary consultation.