Sold a stock for a profit? You can legally cut your tax bill by selling your losers too.

Imagine you bought 100 shares of Apple stock 3 years ago. Today, half of them are up $10,000 (winners) and half are down $5,000 (losers). If you sell ONLY the winners, you owe tax on the $10,000 profit. But if you sell BOTH the winners and the losers in the same year, the loss cancels out part of the gain — so you only owe tax on $5,000 ($10,000 gain minus $5,000 loss). That's tax-loss harvesting: deliberately selling losing investments to cancel out the tax on your winners. Bonus: if your losses are bigger than your gains, you can knock $3,000 off your regular income tax (salary, business income), and the leftover loss saves you tax in future years too.

Meet Alex. He sold $20,000 worth of Tesla stock this year for a $20,000 profit. He's in the 32% federal tax bracket, so he owes $3,000 in long-term capital gains tax (15% × $20,000). Meanwhile, his old GameStop position is currently down $15,000 — he never sold it. WITHOUT HARVESTING: he pays the $3,000 tax. WITH HARVESTING: he sells the GameStop position too, locking in the $15,000 loss. That loss cancels $15,000 of his $20,000 gain. Now he only owes tax on $5,000 of gain = $750. He saves $2,250. He can immediately buy a similar but not-identical stock (say, Roblox instead of GameStop) to keep his money invested. Same dollars at risk in the market. $2,250 less in taxes.

Yes, and most people don't know this exists. If your taxable income for the year is under about $48,000 (single) or $97,000 (married), you pay ZERO federal tax on long-term capital gains. Not 5%, not 1% — actual zero. This is huge in years when your income is temporarily low: sabbatical, parental leave, between jobs, gap year, early retirement. Example: a couple takes a year off to travel. Their income drops to $50,000. They sell $40,000 of appreciated stock — and owe $0 federal tax on the gain. They can immediately re-buy the same stock to lock in the new (higher) cost basis for the future. Free reset. The opposite of tax-loss harvesting — sometimes called 'tax-gain harvesting.'

It's the one big trap with tax-loss harvesting. If you sell an investment at a loss AND buy back the same (or 'substantially identical') investment within 30 days — either before OR after the sale — the IRS disallows your loss for the year. So if you sell $10,000 of Apple stock at a loss on January 1 and buy it back on January 25, your loss doesn't count. THE FIX: wait 31 days, OR buy a similar-but-not-identical investment (sell VTI total-market ETF → buy ITOT total-market ETF). Both ETFs track essentially the same thing, but the IRS treats them as different. WATCH OUT: the rule also applies to your spouse's account and any IRA / 401(k) you control. So if your spouse's IRA auto-buys the same stock during your 30-day window, your loss is wasted. This is why robo-advisors handle this for you — they swap into similar ETFs automatically.

Because the IRS taxes investments very differently based on how long you held them. Held it MORE than 1 year before selling = 'long-term' = favorable rates of 0% / 15% / 20%. Held it 1 year or LESS = 'short-term' = taxed like your salary at 10-37%. So a $10,000 short-term gain for someone in the 32% federal bracket costs $3,200 in tax. The same $10,000 as a long-term gain costs $1,500. That's a $1,700 difference for waiting just one extra day past the 1-year mark. The takeaway: if you bought a stock 11 months ago and it's up, wait one more month before selling.

NIIT stands for 'Net Investment Income Tax' — basically an extra 3.8% federal tax slapped onto your investment profits if you make a lot of money. The threshold: total income above $200,000 (single) or $250,000 (married). If you're under those numbers, ignore NIIT entirely — it doesn't apply to you. If you're over: every dollar of investment profit (capital gains, dividends, interest, rental income) gets an extra 3.8% federal tax on top of the regular capital gains rate. So a high earner in the 20% long-term bracket effectively pays 23.8% on stock gains. Tax-loss harvesting reduces this too — fewer gains realized = less NIIT.

Yes, almost always. Even if you have zero gains this year, harvesting a loss gives you a $3,000 deduction against your regular income — saving roughly $720-$1,110 in tax for most middle-class earners. Anything left over (above $3,000) carries forward to NEXT year, and the year after, and forever. So a $30,000 loss this year keeps saving you tax for ~10 years. Think of harvested losses as a 'tax shield' you build up — when you eventually sell appreciated stock or get a big windfall, the carryforward losses cancel out the gains. ONE EXCEPTION: if you're in the 0% capital gains bracket (low-income year), don't harvest long-term losses. They'd be canceling out tax that's already zero — wasted. Save them for a higher-income year.

Yes — Wealthfront, Betterment, and most major robo-advisors do tax-loss harvesting automatically at no extra cost. They scan your account every day looking for positions that are down, sell them, immediately swap into a similar ETF (avoiding the wash-sale rule), and book the loss for tax purposes. For taxable accounts above $50,000-$100,000, the tax savings often pay for the entire management fee (0.25%/yr) and then some. If you have a Schwab / Fidelity / Vanguard taxable brokerage account that's NOT auto-managed, you'd need to do this manually — usually once at year-end.

DIY is fine for most people. Modern brokerages (Fidelity, Schwab, Vanguard, Robinhood) report all your gains and losses on a 1099-B form at year-end. Tax software (TurboTax, FreeTaxUSA, H&R Block) imports this directly. The only thing you have to actively do is decide WHICH losing positions to sell and WHEN — and that's what this calculator helps with. The wash-sale rule is the one trap to be careful about — keep notes on what you sold and when, and don't auto-rebuy in any of your accounts within 30 days.