In the personal finance world we talk so much about these fancy named accounts: Roth IRA, 401k, HSA, 403B, TSP, etc. Sometimes I get worried we forget about the tried and true REGULAR OLD BROKERAGE ACCOUNT. All of those fancy named accounts are just brokerage accounts with some special rules and tax breaks. Us personal finance nerds can get so worked about them we forget that a plain old taxable brokerage account has TONS OF AMAZING BENEFITS, including potential tax-free growth and spending!

Here’s how it works: In 2025 there are marginal capital gains tax rates set by the federal government. Capital gains are when you sell stuff for a profit, like the investments you hold in a regular brokerage account. There is actually a 0% tax bracket for those single filers with up to $48,350 in income and married filers with up to $96,700 income. That means (if you don’t have other income pushing those numbers up) you can “realize” up to that much in capital gains each year and pay ZERO federal tax.

Additionally, the married filing jointly standard tax deduction for 2025 is $30,000. So you get to subtract that amount from any income. That means you can actually realize up to $126,700 in gains and still pay ZERO federal tax.

Furthermore, we often forget that you don’t pay tax on any PRINCIPAL of your investments. For example, if you invested $10,000 and it grows to $15,000 then you sell and spend the money, you would only be on the hook to pay tax on the gain of $5,000, not the full amount of $15,000. The example in this post assumes Will and Whitney’s investments have doubled when they sell, meaning they wouldn’t owe capital gains tax on the half that is principal.

Also, Will and Whitney live in Nevada, which is one of the eight states that has no state tax on capital gains.

Obviously tax code is complex and this example is very much an “in a vacuum it would work” type example. But it still paints an important picture of the value and flexibility of a regular brokerage account!

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Jeremy