Tax-Loss Harvesting Optimizer Calculator
Optimize tax-loss harvesting strategy. Calculate savings from harvesting losses to offset gains, understand short-term vs long-term offset rules, and plan carryover losses for future years.
Current Gains & Losses
Assets held under 1 year. Taxed as ordinary income (higher rate).
Assets held over 1 year. Taxed at preferential 0-20% rate.
Potential Losses to Harvest
Positions currently showing losses that you could sell to realize the loss.
Tax Profile
Current Tax Situation
Net Short-Term:$10000.00
Net Long-Term:$20000.00
Current ST Tax:$3500.00
Current LT Tax:$3000.00
Total Tax:$6500.00
Recommended Harvesting Strategy
Harvest Partial Losses
Losses to Harvest:$5000.00
Tax Savings:$1750.00
Strategy 1: Harvest All Losses
Harvest Amount:$5000.00
New ST Tax:$1750.00
New LT Tax:$3000.00
Ordinary Deduction:$0.00
Total Tax:$4750.00
Savings:$1750.00
Strategy 2: Harvest Partial Losses
Harvest Amount:$5000.00
Total Tax:$4750.00
Savings:$1750.00
Wash Sale Rule Warning
Avoid repurchasing the same or substantially identical security within 30 days before or after the sale. The IRS will disallow the loss deduction.
Solution: Buy a similar but not identical ETF (e.g., sell S&P 500 fund, buy total market fund), or wait 31+ days before repurchasing.
Tax-Loss Harvesting Rules
- Offset Order: Short-term losses first offset short-term gains. Then long-term gains. Then $3000 ordinary income.
- Long-Term Losses: First offset long-term gains. Then short-term gains. Then $3000 ordinary income.
- Best Strategy: Harvest losses to offset short-term gains first (saves at higher ordinary rate).
- $3000 Limit: Net losses exceeding gains can deduct $3000 ($1500 married separate) from ordinary income yearly.
- Carryover: Unused losses carry forward indefinitely. No expiration.
- Wash Sale: 30-day rule before/after sale. Loss disallowed if repurchase same/substantially identical security.
- Timing: Harvest before year-end to lock in deduction. Consider market conditions.
- Rebalance: Use harvesting as opportunity to rebalance portfolio into desired allocation.
Tax Rates Applied
- Short-Term Gains: 35% (ordinary income marginal rate)
- Long-Term Gains: 15% (preferential capital gains rate)
- Ordinary Income Deduction: 22% (marginal rate on wages)
Rates are approximate. Consult tax professional for your actual marginal rates.