Estimate how much tax you save by selling investments at a loss. Enter the gains you have already realized, the losses you plan to harvest and your tax rates to see the gains offset, the up-to-$3,000 deduction against ordinary income, and a year-by-year schedule for any loss you carry forward.
Last updated:
Gains already realized this year
$
Assets held 1 year or less
$
Assets held more than 1 year
Losses you harvest
$
$
$
$
Your tax rates
%
0 if your state has no income tax
$
Per year, for the carryforward schedule
Enter your values to see the result.
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How to use the Tax Loss Harvesting Calculator
Enter gains you have already realized this year, split into short-term and long-term.
Enter the losses you plan to harvest, and any loss carryover from last year's return.
Pick your federal bracket, long-term gains rate and state rate, and tick NIIT if it applies.
Optionally enter expected future gains to see how fast a carryforward is used.
Press Calculate tax savings to see savings now, the carryforward and the schedule.
How capital losses are netted
Same type first. Short-term losses (assets held 1 year or less) offset short-term gains; long-term losses offset long-term gains. Last year's carryovers join their own group.
Cross-netting. If one group ends with a net loss and the other with a net gain, the loss reduces the gain.
Ordinary income deduction. A remaining net capital loss reduces other income by up to $3,000 ($1,500 married filing separately).
Carryforward. Anything left carries to next year, keeping its short-term or long-term character; the short-term part is used first against the $3,000.
Example: $6,000 short-term and $12,000 long-term gains. You harvest $4,000 of short-term and $20,000 of long-term losses. Short-term nets to +$2,000, long-term to −$8,000; cross-netting leaves a $6,000 net loss. $3,000 is deducted from ordinary income and $3,000 carries forward. In the 24% bracket with 15% long-term rate and 5% state tax, tax drops from $4,140 to −$870 (a reduction on other income), a $5,010 saving this year, plus about $870 next year.
2026 federal capital gains rates
Long-term gains are taxed at 0%, 15% or 20% depending on taxable income; short-term gains are taxed like wages. Approximate 2026 thresholds for the long-term rates:
Filing status
0% up to
15% up to
20% above
Single
$49,450
$545,500
$545,500
Married filing jointly
$98,900
$613,700
$613,700
Head of household
$66,200
$579,600
$579,600
The 3.8% net investment income tax applies on top when modified AGI exceeds $200,000 (single) or $250,000 (married filing jointly); those thresholds are not indexed.
Harvesting tips
Harvest before December 31. The sale (trade) date must fall in the tax year you want the loss to count in.
Avoid wash sales by waiting 31 days to buy back, or buy a similar fund that tracks a different index.
Prioritize short-term gains. Losses that wipe out short-term gains save your full marginal rate.
Track carryovers. Your carryover is reported on Schedule D; keep the worksheet so next year's numbers are right.
Taxable accounts only. Losses inside IRAs, 401(k)s and other tax-advantaged accounts cannot be deducted.
Thresholds reflect 2026 inflation adjustments (IRS Rev. Proc. 2025-32) and may be rounded; check the current IRS figures for your return. This is an estimate, not tax advice.
Frequently asked questions
How does tax loss harvesting save money?
You sell an investment that is below what you paid, and the realized loss offsets capital gains you would otherwise pay tax on. If losses exceed gains, up to $3,000 a year ($1,500 if married filing separately) reduces ordinary income, and the rest carries forward to future years.
In what order are capital losses applied?
Short-term losses first offset short-term gains and long-term losses offset long-term gains. A net loss in one group then offsets a net gain in the other. Any remaining net loss is deducted up to the $3,000 limit, and the rest carries forward keeping its short-term or long-term character.
Is the $3,000 capital loss limit per year?
Yes. The deduction against wages and other ordinary income is capped at $3,000 per year ($1,500 for married filing separately). The limit has not been indexed for inflation. Unused losses carry forward indefinitely until used or until the taxpayer dies.
What is the wash-sale rule?
If you buy the same or a substantially identical security within 30 days before or after selling it at a loss, the loss is disallowed for now and added to the cost basis of the new shares. Buying in an IRA or a spouse's account can also trigger it. Many investors switch to a similar but not identical fund for 31 days.
Are short-term losses more valuable than long-term losses?
A loss is worth the most when it offsets income taxed at a high rate. Short-term gains and ordinary income are taxed at your regular bracket, while long-term gains are taxed at 0%, 15% or 20%. The netting rules decide which gains a loss actually offsets, which this calculator follows.
Is tax loss harvesting a permanent saving?
Partly. Selling and buying a replacement lowers your cost basis, so you may pay more tax when you eventually sell. The benefit is permanent when the loss offsets short-term gains or ordinary income but the later gain is taxed at lower long-term rates, or if you hold until death or donate the shares.
Does harvesting help if my long-term gains rate is 0%?
Usually not for offsetting long-term gains, since they would be taxed at 0% anyway. Losses must offset gains before they reduce ordinary income, so harvesting in a 0% year can use up losses that would be more valuable in a higher-income year.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.