What if?
The same sale under different choices, each computed by the engine rather than estimated. Figures are the tax on the gain, so the rows stay comparable when a variant spans two tax years. Select one to load it into the calculator and read its full derivation.
Estimates only — this is not tax advice. Consult a CPA or enrolled agent before acting on these figures. The calculator does not model the alternative minimum tax, wash sales, like-kind exchanges, QSBS, installment sales, or state additions and subtractions. See what is out of scope.
Show your work — 0 steps, each with its rule and citation
How Mississippi taxes a capital gain
Statutory authority: Miss. DOR Pub. 89-700-25-1, table headed "Income Tax Rates", column "Taxable Income (Tax Year 2026)" (retrieved 2 September 2026)
Mississippi is not a flat-rate state, and the difference is $400
Rate tables almost universally list Mississippi as "4%". The Department of Revenue publishes something more specific: the first $10,000 of taxable income is taxed at 0%, and only the balance above that is taxed at 4.0%.
For anyone with a taxable income above $10,000 the arithmetic difference is fixed and easy to state. Four per cent of the first $10,000 would be $400, and that $400 is never charged. Every summary that flattens Mississippi to a single rate therefore overstates the bill by exactly that amount, for every filer, every year. It is not a large error in proportional terms on a big gain, but it is an error in the same direction for everybody.
For a small gain the difference is not $400 but the whole bill. A Mississippi taxpayer whose taxable income stays inside the band pays no state income tax on the gain at all, and a flat-rate model would invent a charge that does not exist.
The zero band is not the standard deduction, and not the exemption
Three separate reductions sit between gross income and a Mississippi tax bill, and they are routinely conflated. The standard deduction is $2,300 for a single filer and $4,600 for a married couple. The personal exemption is $6,000 single and $12,000 married, with $9,500 for a head of family. Both of those reduce taxable income before any rate applies.
The zero-rate band is a third thing, applied after them. It is not an allowance against income; it is a rate of nought per cent on the first slice of whatever taxable income remains. Someone reading a summary that mentions only one of the three will land in the wrong place, and the direction of the error depends on which one they read.
This calculator models the band. It does not model the Mississippi standard deduction or personal exemption, because it approximates the state base from federal taxable income. The practical consequence is that a Mississippi figure here is an upper bound: your real bill is this or lower.
The band is $10,000 whoever you are
Most states with a graduated structure widen their brackets for joint filers, usually by doubling them. Mississippi does not. The zero-rate band is $10,000 of taxable income for a single filer, for a head of family and for a married couple filing jointly alike.
That makes the band worth proportionally less to a couple than to a single filer, and it is the opposite of what someone familiar with federal brackets would assume. A married couple whose Mississippi taxable income comes to $9,800 still pays nothing; the same couple at $20,000 pays 4% on $10,000, not on $10,000 of a doubled allowance.
A phase-down that has already caused confusion
Mississippi has been reducing its rate on a schedule, and the figure that applies depends entirely on which year you are asking about. The Department’s frequently-asked-questions page states 4.4% without naming a tax year; the withholding publication states 4.0% under a heading that names tax year 2026 explicitly.
These are not in conflict. 4.4% is the 2025 rate, republished without its year — the same kind of stale-year artifact that has caused trouble elsewhere on this site. The lesson generalises: a rate quoted without the year it applies to has not really been sourced, and Mississippi is mid-schedule, so the year matters more here than in a state whose rate has not moved in a decade.
Who the band actually helps
A zero-rate band on the first $10,000 sounds like a rounding detail on a large sale, and on a large sale it is. Its real effect falls on a narrower group, and it is worth being specific about who.
The clearest case is a low-income year. Someone between jobs, on sabbatical, newly retired before pensions begin, or living on savings can realise a modest gain and find the whole of their Mississippi taxable income sitting inside the band. For them the band does not reduce the state bill; it removes it. The same is true for a retiree selling a small holding, particularly since Mississippi already exempts qualifying retirement income, which keeps other taxable income low.
For anyone with an ordinary salary the band is consumed by wages long before a gain is stacked on top, and the practical benefit collapses to the flat $400 that four per cent of $10,000 would otherwise have cost. Both effects are real; they are simply very different in size, and a summary that reports Mississippi as "4%" misses the first entirely.
What Mississippi does not change, and what it excludes
Above the band, Mississippi gives capital gains no preferential treatment at all. A gain is taxed at the same 4.0% as a paycheque, with no distinction for how long the asset was held, so the holding period is worth nothing at the state level and everything at the federal one.
Your federal treatment is unaffected by living in Mississippi: the 0/15/20% ladder, the 3.8% net investment income tax, the Section 121 home-sale exclusion and Section 1250 depreciation recapture all apply as they would anywhere.
Two narrow Mississippi exclusions are not modelled here. Gains on the authorised shares of financial institutions domiciled in Mississippi are exempt, as are gains on certain domestic corporation or partnership interests held more than a year. Neither reaches an ordinary sale of listed securities or a second home, which is why they are disclosed rather than implemented.
A worked Mississippi example
Every figure below is computed by the same engine that powers the calculator above, at the moment this page was built — not typed in by hand. When the tax-year data is updated, this example updates with it.
A $5,000 gain that costs nothing in Mississippi
A single filer in Mississippi earning $20,000 sells shares for a $5,000 long-term gain. This is the case a flat-rate model gets wrong outright rather than approximately.
- Taxable income after deduction
- $8,900
- Taxable gain
- $5,000
- Tax owed without the sale
- $390
- Tax the sale added
- $0
- Total federal tax
- $390
- Mississippi state tax
- $0
- Effective rate on the gain
- 0%
The state line is zero. Taxable income stays inside the $10,000 band, so no Mississippi tax arises on the gain at all — while a model that applied a flat 4% would have reported a charge of $200 that the taxpayer does not owe.
Caveats on this example (2)
- Net investment income was derived from capital gains and qualified dividends only. Interest, non-qualified dividends, rents, royalties and passive business income inside ordinaryIncome are also net investment income under IRC 1411(c) and are not counted here.
- Mississippi: the state taxable income base is approximated by federal ordinary taxable income. State additions, subtractions and deductions are not modelled.
Show the working — 11 steps, each with its citation
- Net short-term capital gain or loss for the year$0
Assets held one year or less. Taxed at ordinary rates if a net gain.
- Net long-term capital gain or loss for the year$5,000
Assets held more than one year. Eligible for the 0/15/20% rates.
- Standard deduction-$16,100
Adjusted gross income of $25,000 less $16,100.
- Taxable income$8,900
The figure the rate tables and the capital gain ceilings are both measured against.
- Ordinary income taxed at 10%$390
$3,900 of taxable income between $0 and $3,900.
- Ordinary income stacked below the long-term gain$3,900
Long-term gain is taxed by reference to where it sits ON TOP of $3,900 of other taxable income, not from the bottom of the rate table.
- Long-term gain taxed at 0%$0
Taxable income stays at or below the $49,450 maximum zero-rate amount.
- Net investment income tax threshold$200,000
Modified AGI of $25,000 against the $200,000 threshold for a single filer. This threshold is statutory and is not adjusted for inflation.
- Net investment income tax does not apply$0
Modified AGI is $175,000 below the threshold.
- Mississippi income tax on the gain$0
$5,000 stacked on $3,900 of other taxable income across a 2-bracket ladder topping out at 4%. Federal ordinary taxable income is used as the base; the state's own taxable income differs, so treat this as an approximation.
- Total tax$390
$390 on $25,000 of total income, an effective rate of 1.56%.
The same band, on a joint return
A married couple filing jointly with $38,000 of income sells for a $4,000 gain. The band is $10,000 for them too — it is not doubled the way a federal bracket would be.
- Taxable income after deduction
- $9,800
- Taxable gain
- $4,000
- Tax owed without the sale
- $580
- Tax the sale added
- $0
- Total federal tax
- $580
- Mississippi state tax
- $0
- Effective rate on the gain
- 0%
Taxable income of $9,800 sits just inside the band, so Mississippi charges nothing. Another $200 of income would have pushed the couple over it — and because the band is not widened for joint filers, that edge arrives at the same place it would for someone filing alone.
Caveats on this example (2)
- Net investment income was derived from capital gains and qualified dividends only. Interest, non-qualified dividends, rents, royalties and passive business income inside ordinaryIncome are also net investment income under IRC 1411(c) and are not counted here.
- Mississippi: the state taxable income base is approximated by federal ordinary taxable income. State additions, subtractions and deductions are not modelled.
Show the working — 11 steps, each with its citation
- Net short-term capital gain or loss for the year$0
Assets held one year or less. Taxed at ordinary rates if a net gain.
- Net long-term capital gain or loss for the year$4,000
Assets held more than one year. Eligible for the 0/15/20% rates.
- Standard deduction-$32,200
Adjusted gross income of $42,000 less $32,200.
- Taxable income$9,800
The figure the rate tables and the capital gain ceilings are both measured against.
- Ordinary income taxed at 10%$580
$5,800 of taxable income between $0 and $5,800.
- Ordinary income stacked below the long-term gain$5,800
Long-term gain is taxed by reference to where it sits ON TOP of $5,800 of other taxable income, not from the bottom of the rate table.
- Long-term gain taxed at 0%$0
Taxable income stays at or below the $98,900 maximum zero-rate amount.
- Net investment income tax threshold$250,000
Modified AGI of $42,000 against the $250,000 threshold for married filing jointly. This threshold is statutory and is not adjusted for inflation.
- Net investment income tax does not apply$0
Modified AGI is $208,000 below the threshold.
- Mississippi income tax on the gain$0
$4,000 stacked on $5,800 of other taxable income across a 2-bracket ladder topping out at 4%. Federal ordinary taxable income is used as the base; the state's own taxable income differs, so treat this as an approximation.
- Total tax$580
$580 on $42,000 of total income, an effective rate of 1.38%.
What this calculator does not cover for Mississippi
The Mississippi figure stacks your gain on your federal ordinary taxable income. Mississippi computes its own taxable income with its own additions and subtractions, which are not modelled here — so treat the state number as a close approximation for a straightforward wage-and-sale situation, and as a rough one if your return carries significant state adjustments.
Full-year residency is assumed throughout. Part-year residents, non-residents, and gains sourced to property in another state all turn on rules this calculator does not model. The complete list of what is in and out of scope is on the methodology page.
Other states
- TexasNo individual income tax. Federal tax still applies in full.
- FloridaNo income tax by constitutional amendment. Federal tax still applies.
- GeorgiaFlat 4.99% — not the 5.19% still widely published.
See the full 2026 capital gains guide for the federal rules that apply wherever you live — the rate ladder, the net investment income tax, the home-sale exclusion and depreciation recapture — plus every state we currently cover.