Tax-Loss Harvesting Savings Calculator
Example: Loss amount to harvest: 10000 $ · Annual taxable income: 110000 $ · Filing status (0 = Single, 1 = Married Filing Jointly): 0 · Do you have short-term gains to offset? (0 = No, 1 = Yes): 1 · State income tax rate: 5 %
| Total tax saved (federal + state) | $2,833 |
| Federal tax saved | $2,333 |
| State tax saved | $500 |
| Effective harvest rate (savings as % of loss) | 28.33% |
Worked example
A single filer with $110,000 income and short-term gains to offset harvests a $10,000 loss. At a 22% federal marginal rate + 5% state rate, the $10,000 loss saves $2,200 federal + $500 state = $2,700 total — an effective harvest rate of 27%. Without short-term gains, the $3,000 annual cap limits federal savings to $660 in year 1, with the rest carried forward.
Frequently asked questions
What is the wash-sale rule?
You cannot repurchase the same or a substantially identical security within 30 days before or after the sale that generated the loss. Doing so disallows the loss. The 30-day window applies on both sides of the sale date. Buying a similar-but-not-identical ETF (e.g., switching from SPY to IVV) generally avoids the rule.
Can unused capital losses carry forward forever?
Yes. Capital losses that exceed the annual $3,000 ordinary income deduction carry forward indefinitely. They retain their character (short-term losses first offset short-term gains; long-term losses offset long-term gains, then cross-apply). There is no expiration.
Does tax-loss harvesting make sense in a tax-advantaged account?
No. Losses inside a traditional IRA, Roth IRA, or 401(k) are not deductible — there is no tax benefit from realizing a loss inside a sheltered account. Tax-loss harvesting applies only to taxable brokerage accounts.