Tax loss harvesting calculator: your real 2026 saving, the $3,000 limit, and the capital loss carryover.
Enter the gains you have already realized and the losses you are thinking of harvesting. This runs the Schedule D netting order, values every offset dollar at the rate of the gain it actually killed, applies the $3,000 ordinary income cap, and tells you what carries forward.
Most tax loss harvesting calculators multiply your harvest by one marginal rate and print the product. That number is almost always too big, because losses have to find gains before they find your salary.
Tax loss harvesting calculator
Gains you have already realized this year
Losses you would harvest
Your tax position
With no future gains to absorb it, that balance drains at a year and takes more years to use up.
A calculator that multiplied your whole harvest by would have told you . It is out by , because losses have to find gains before they reach your ordinary income.
Roughly of that saving is deferral, not forgiveness: the losses you used cut the basis of whatever you bought back, so the tax reappears on a later sale. Hold the replacement for years at % and the deferral alone is worth about . Never sell it, and the step-up at death makes the whole thing permanent.
2026 federal brackets from Rev. Proc. 2025-32. Estimate only, not tax advice. Assumes the standard deduction, that your other income is a reasonable proxy for modified AGI, and that your state taxes capital gains at the flat rate you entered.
The short answer
A harvested loss is not worth its face value times your tax rate. It offsets realized capital gains dollar for dollar with no cap, and only the net loss left over reaches ordinary income, where IRS Publication 550 limits the deduction to the lesser of $3,000 ($1,500 married filing separately) or your total net loss. Everything above that carries forward indefinitely and keeps its short-term or long-term character. So the value of harvesting depends far more on what gains you have already realized than on how much you harvest.
Last updated September 2026.
How the calculation actually runs
Losses do not go where you think they go
The order is fixed and it is not the order most people assume. Short-term gains and short-term losses net against each other first. Long-term gains and long-term losses net against each other, separately. Only after both sides have settled internally do they meet, and only if the combined result is a loss does any of it touch your salary.
This matters because the two sides are taxed at completely different rates, so which pot a loss lands in decides what it is worth. A short-term loss that cancels a short-term gain is saving you the ordinary rate. The same dollar of loss, if it ends up offsetting a long-term gain instead, saves you the capital rate, which for most people is roughly half as much.
| Step | What happens | Rate the loss saves at |
|---|---|---|
| 1 | Short-term losses net against short-term gains | Ordinary rate, up to 37% plus 3.8% NIIT |
| 2 | Long-term losses net against long-term gains | 0%, 15% or 20% plus 3.8% NIIT |
| 3 | A surplus loss on one side crosses to the other side's surplus gain | The rate of the gain it kills |
| 4 | A remaining net loss reduces ordinary income, capped | Ordinary rate, on $3,000 at most |
| 5 | Whatever is left carries forward, character intact | Nothing this year |
Step three is where the biggest single-year win hides. If your long-term losses more than cover your long-term gains, the surplus goes looking for short-term gains, and it kills them at the ordinary rate. A long-term loss harvested in a year you also flipped something quickly can end up saving 40.8% federally instead of 23.8%. Nothing in the SERP's calculators models that crossover.
Capital loss carryover calculator
The $3,000 limit is where most estimates fall apart
Publication 550 puts the limit plainly: "Your allowable capital loss deduction, figured on Schedule D (Form 1040), is the lesser of: $3,000 ($1,500 if you are married and file a separate return), or Your total net loss as shown on line 16 of Schedule D (Form 1040)."
Read that with the netting order in mind and the practical consequence appears. If you have no realized gains at all, harvesting $60,000 of losses does not save you $60,000 times your rate. It saves you $3,000 times your rate, and hands you a $57,000 carryover. In the 32% bracket that is $960 of tax this year against a balance that, with no future gains, takes another nineteen years to spend. The losses are real and they are not wasted, but the year you claim them is not the year you harvested them.
The carryover also has no expiry. Publication 550 says you can carry a loss over to later years "until it is completely used up". There is no clock running out. What there is instead is a mortality problem: a large carryover absorbed at $3,000 a year outlives many of the people holding it, and it does not pass to heirs.
One more detail that separates a correct carryover figure from a wrong one. The carryover keeps its character. Publication 550: "When you carry over a loss, it remains long-term or short-term. A long-term capital loss you carry over to the next tax year will reduce that year's long-term capital gains before it reduces that year's short-term capital gains." A $40,000 long-term carryover is therefore worth measurably less than a $40,000 short-term carryover, because it is queued against the cheaper gains first. The calculator above tracks the two separately for that reason.
Where you live
State tax can be a third of the whole benefit
Most states with an income tax give capital gains no preferential rate at all, which means a harvested loss saves the full state marginal rate on top of the federal one. Leave the state field at zero and you will understate the benefit badly if you live somewhere expensive.
California is the clearest case, and it is worth stating with the actual filed numbers rather than the usual shorthand. The Franchise Tax Board's 2025 Form 540 rate schedules put a single filer into the 9.30% band at $72,724 of taxable income and top out at 12.30% above $742,953, with the joint schedule reaching 12.30% above $1,485,906. There is then a further 1% on taxable income above $1,000,000, which is where the familiar 13.3% comes from.
A detail almost every article still gets wrong: that 1% is no longer called the Mental Health Services Tax. The 2025 Form 540 booklet states that "For taxable years beginning on or after January 1, 2025, the Mental Health Services Act has been renamed to the Behavioral Health Services Act. Therefore, references to the Mental Health Services Tax have been renamed to Behavioral Health Services Tax." Same 1%, same $1,000,000 threshold, new name on the line 62 instruction.
Put numbers on it. A single Californian with $245,000 of income sits in the federal 32% ordinary band and the 15% long-term band, and is over the $200,000 net investment income tax threshold. A long-term harvested loss saves 15% plus 3.8% plus 9.30%, so 28.1%, against 18.8% for the same investor in Texas or Florida. That is a 49% larger benefit for identical trades, which is why harvesting is worth automating in a high-tax state at portfolio sizes where it would not be worth the effort elsewhere. Which providers that actually rescues, and which ones it does not, is worked through in the best tax loss harvesting software for California investors.
| Investor, $245,000 income, single | Long-term loss saves | Short-term loss saves |
|---|---|---|
| Texas, Florida, Washington (no state income tax) | 18.8% | 35.8% |
| California, 9.30% band | 28.1% | 45.1% |
| California, top 12.30% band | 31.1% | 48.1% |
Federal rates from Rev. Proc. 2025-32 plus the 3.8% net investment income tax. California rates from the Franchise Tax Board 2025 Form 540 tax rate schedules; the state has not yet published 2026 schedules as of September 2026. The top two rows assume the taxpayer is in that state band, which the $245,000 figure alone does not determine.
Is it worth it
Part of the saving is a loan, and that is fine
Harvesting a loss lowers the basis of whatever you buy to replace the position. Sell that replacement later and the gain is bigger by exactly the loss you claimed. So a share of this year's number comes back. Anyone selling harvesting as pure free money is skipping that step, and any calculator that ignores it is overstating a multi-year strategy.
What survives the accounting is still worth real money, for four reasons. The deferred tax stays invested and compounds for you rather than for the Treasury. A short-term loss claimed now against ordinary income, repaid later as a long-term gain, is straight rate arbitrage. Losses banked in a high-income year can be spent in a low-income year. And a replacement position held until death gets a stepped-up basis, at which point the deferral was never a loan at all.
The published estimates of what that is worth vary a lot, and the spread is mostly about who is being modeled. Wealthfront's whitepaper reports 0.18% to 0.44% a year of account value on the US stocks portion, derived from a 3.61% harvesting yield against 2.60% for an ETF-only portfolio, at marginal rates from 18% to 44%, backtested from February 4 2015 to December 31 2025. J.P. Morgan Asset Management measured roughly 30 basis points of extra annualized tax alpha purely from scanning daily rather than monthly, across 16 scenarios between 2018 and 2021. Vanguard's personalized indexing material quotes "up to 1%-2% or more annually" but attaches a condition that is easy to miss: it applies to clients who regularly realize large capital gains, which is the same conclusion the netting order forces.
The pattern in all three is the same one the calculator shows. Harvesting pays in proportion to the gains you have to offset. If you never realize gains, you are harvesting into a $3,000 pipe.
Where the losses come from
A fund has one price, an index has five hundred
The calculator assumes you have losses to harvest. In a year the market ends up, an index fund investor usually does not. One S&P 500 fund is a single position with a single basis, and when it is above water there is nothing to sell.
Holding the constituents changes the arithmetic. In any year the index rises, a meaningful share of its members still fall, and each one is a separate lot with its own basis. That is the whole mechanism behind the harvesting yield figures above, and it is why the number moves with the number of positions rather than with the size of the account. Our page on direct indexing and tax loss harvesting goes through where those losses actually come from, and tax loss harvesting software compares which providers scan daily, which scan quarterly, and what each of them charges to do it.
The constraint on doing it by hand is not effort, it is section 1091. Every replacement purchase inside the 61 day window risks disallowing the loss you just booked, and the rule follows you across accounts your broker cannot see. If you are matching trades manually, run them through the wash sale calculator first, and check that the lot your broker will actually sell is the one you meant with the cost basis calculator.
Tax loss harvesting questions
Questions people ask before December 31
How much can you write off with tax loss harvesting?
There is no limit on losses used against capital gains, and a hard limit on the rest. Harvested losses offset realized gains dollar for dollar with no cap. Only the net loss left after that reaches ordinary income, and Publication 550 caps that deduction at the lesser of $3,000 ($1,500 if married filing separately) or your total net loss. Anything above it carries forward.
How do I calculate my capital loss carryover?
Net short-term gains against short-term losses, net long-term against long-term, then combine the two results. If the combined figure is a loss, subtract the amount you deducted against ordinary income this year, up to $3,000. What remains is your carryover. Publication 550 adds that it keeps its character: a long-term carryover reduces next year's long-term gains before it touches short-term gains.
How long can you carry forward a capital loss?
Indefinitely, for as long as you live. Publication 550 says you can carry a loss over to later years "until it is completely used up", with no expiry date attached. The practical constraint is absorption speed, not expiry: with no future gains to offset, a carryover only drains at $3,000 a year, so a $60,000 balance takes twenty years to use and dies unused with you.
Is tax loss harvesting actually worth it?
It depends on whether you have gains to offset and how long you hold. Harvesting lowers the basis of what you buy back, so part of the benefit is deferral rather than permanent saving. It becomes real money when short-term losses offset short-term gains taxed up to 40.8%, when the deferral runs for years, or when the replacement is never sold and gets a step-up at death.
Does tax loss harvesting save more in California?
Substantially more, because California applies its ordinary schedule to capital gains. The Franchise Tax Board rate schedules put the 9.30% band at $72,724 of taxable income for a single filer and top out at 12.30%, with a further 1% Behavioral Health Services Tax above $1,000,000 of taxable income. A long-term loss worth 18.8% federally is worth about 28.1% to a Californian in the 9.30% band.
What is the difference between a short-term and a long-term harvested loss?
The rate they save at, and it is a wide gap. A short-term loss nets against short-term gains taxed as ordinary income, up to 37% plus the 3.8% net investment income tax. A long-term loss nets against long-term gains taxed at 0%, 15% or 20% plus the same 3.8%. Harvesting a short-term loss against a short-term gain is the most valuable trade available.
Do I have to have gains to harvest losses?
No, but without gains the payoff arrives very slowly. With no realized gains the entire harvest becomes a net loss, of which only $3,000 reduces ordinary income this year and the rest waits for a future year with gains. Harvesting is worth the most in a year you have already realized gains, which is exactly the year most people forget to look.
Does the wash sale rule apply to harvested losses?
Yes, and it is the reason harvesting is hard to do by hand. Section 1091 disallows the loss if you buy substantially identical stock within 30 days before or after the sale, a 61 day window that follows the taxpayer across every account including an IRA and a spouse's account. Our wash sale calculator works out the disallowed amount and the first clean repurchase date.
Give yourself something worth harvesting
Build the allocation you want as a weighted index and hold the individual names instead of a single fund share. Every position becomes its own lot, with its own basis and its own loss opportunity, in years when the index itself never dips.
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