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Tax simulator
Tax-loss harvesting benefit estimator
Selling an investment at a loss can lower this year's tax bill by offsetting gains first, then a capped slice of ordinary income, with the rest carried to future years. This walks a harvestable loss through that order and shows the tax saved at each step. It also makes the catch clear: harvesting mostly moves tax to later rather than erasing it, because the replacement holding carries a lower cost basis and a larger gain waits down the road.
Background reading: Investing the rest
Estimated current-year tax saved
$14,289
On a $60,000 harvested loss, tax year 2026.
How the loss is applied
Loss applied to realized gains$40,000
Tax saved on gains (15.0% gains + 3.8% NIIT + 13.3% state)$12,840
Loss applied to ordinary income (capped)$3,000
Tax saved on ordinary income (35.0% ordinary + 13.3% state)$1,449
Carried forward to future years$17,000
Total saved this year$14,289
Where this goes next
This estimates the current-year benefit and flags that it is mostly deferral; it does not tell you which holdings to sell. That is a conversation with a CFP.
Assumptions and simplifications
- Harvesting defers tax rather than erasing it: rebuying lowers your cost basis, so a larger gain waits later. The real benefit is the time value of paying later plus the rate arbitrage when the loss offsets ordinary income at a higher rate than the capital-gains rate paid later.
- The loss offsets realized capital gains first, then up to the annual ordinary-income limit, then carries forward with no expiration.
- The wash-sale rule disallows the loss if you buy a substantially identical security within 30 days on either side; this assumes you avoid it.
- Rates are estimated at the marginal level the income stacks into, plus an optional state rate; the figure is the gross current-year tax reduction, not a permanent saving.