Tax loss harvesting software: what Fidelity, Vanguard, Schwab and Wealthfront actually automate.
Every roundup tells you which platforms offer harvesting. None of them tells you which ones run it on an algorithm and which leave it to a portfolio manager's judgment. That difference decides what you receive.
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In short
Tax loss harvesting software splits into three tiers. Robo-advisors harvest at the fund level: Betterment Digital and Vanguard Digital Advisor both include it, Vanguard from a $100 balance at a 0.20% gross advisory fee, and Schwab Intelligent Portfolios charges nothing extra but requires $50,000 in assets and an explicit election before any harvesting happens. Direct indexing accounts harvest individual stocks, which is strictly more powerful: Wealthfront S&P 500 Direct and Frec Classic both charge 0.09%, and Fidelity Managed FidFolios and Schwab Personalized Indexing charge 0.40%. Above roughly $250,000, adviser-channel managers take over, and their Form ADV filings show Vanguard Personalized Indexing running an automated algorithm at 0.20% while Parametric harvests "in Parametric's discretion" at 35 bps. Fidelity likewise harvests "at the discretion of the portfolio manager", which is the single most overlooked line in the category.
Last updated August 2026
Tax loss harvesting software compared
Who harvests what, how, and from what balance
Read the second and third columns before the price. A cheap product that harvests at the fund level and an expensive one that harvests individual stocks are not doing the same job, and a discretionary process is not the same purchase as an algorithm.
| Product | What it can harvest | Automated or discretionary | Balance before harvesting starts | Annual fee | Source |
|---|---|---|---|---|---|
| Wealthfront S&P 500 Direct | Individual stocks in the S&P 500 | Automated | $5,000 | 0.09% | wealthfront.com, 08/2026 |
| Frec Classic | Individual stocks, 25 index strategies | Automated, with a strategic wash sale setting | $20,000 | 0.09% to 0.35% | frec.com/pricing, 08/2026 |
| Wealthfront US Direct Indexing | Individual US stocks | Automated | $100,000 Automated Investing balance | 0.25% | wealthfront.com, 08/2026 |
| Betterment Digital | ETFs, at the fund level | Automated | No account minimum | $5 a month or 0.25% | betterment.com, 08/2026 |
| Vanguard Digital Advisor | Funds and ETFs, at the fund level | Automated, no extra charge | $100 in a Vanguard Brokerage Account | 0.20% gross advisory fee, index portfolio | investor.vanguard.com, 08/2026 |
| Schwab Intelligent Portfolios | ETFs, at the fund level | Automated, but you must elect it | $50,000 in assets to enroll | No additional fee for harvesting | intelligent.schwab.com, 08/2026 |
| Fidelity Managed FidFolios | Individual stocks | Discretionary, "on a limited basis" | $5,000 invested | 0.40% index, 0.70% active | fidelity.com, 08/2026 |
| Schwab Personalized Indexing | Individual stocks | Monitored daily by portfolio managers | $100,000 | 0.40%, 0.35% above $2M | schwab.com, 08/2026 |
| Vanguard Personalized Indexing | Individual stocks | Automated TLH Algorithm | $250,000 preferred, via an adviser | 0.20% first tier, adviser channel | Form ADV Part 2A, 07/22/2026 |
| Parametric Custom Core | Individual stocks | Discretionary, "in Parametric's discretion" | $250,000 direct, $25,000 via Select UMA | 35 bps domestic equity | Form ADV Part 2A, 03/31/2026 |
| Aperio (BlackRock) | Individual stocks | Systematic, but depends on your custodian | None filed, $250,000 via Select UMA | 0.35% US domestic | Form ADV Part 2A, 03/31/2026 |
| A plain S&P 500 ETF | Nothing at the stock level | You harvest it yourself, or not at all | One share | 0.03% to 0.10% | Issuer pages, 08/2026 |
One row in that table is quietly the most important. Schwab Intelligent Portfolios does not charge for harvesting, which reads like the best deal on the page, but the service only runs if you have $50,000 in the account and you have actively enrolled. Schwab's own wording is "you must be enrolled for tax-loss harvesting to occur." A large number of people believe their robo account has been harvesting for years when the setting was never switched on. Check it before you compare anything else.
Automated vs discretionary harvesting
The word "discretion" is what separates two products that cost the same
Providers do not advertise this distinction, but they all disclose it. Here is the actual language, quoted from the pages and filings it appears in.
Algorithmic
Vanguard Personalized Indexing's Form ADV says "the TLH Algorithm identifies tax-loss harvesting opportunities and initiates buy/sell orders to harvest such tax losses in taxable accounts." Aperio's says its Active Tax Management "utilizes software designed to systematically harvest losses within the portfolio and immediately replace the securities sold at a loss with others of similar type and risk." Schwab says Personalized Indexing accounts are monitored "separately on a daily basis." Wealthfront and Frec both run continuous automated harvesting on retail accounts. In each case the process runs whether or not anyone is paying attention to your account this week.
Discretionary
Fidelity states that on Managed FidFolios, "tax-smart investing strategies, including tax-loss harvesting, are applied in managing certain taxable accounts on a limited basis, at the discretion of the portfolio manager." Parametric's Form ADV says it uses harvesting "when deemed, in Parametric's discretion, to be in the client's best interest and compliant with the client's mandate." Neither firm is doing anything wrong, and both are excellent managers. But you are buying a judgment call on a schedule they choose, not a daily scan, and the two are priced as though they were the same thing.
Scan frequency has a measured price. J.P. Morgan Asset Management modelled 16 scenarios between 2018 and 2021 and found roughly 30 basis points of additional annualized tax alpha from scanning daily rather than monthly. That is most of a 0.40% fee, produced by nothing except how often the software looks. When a provider will not say how often it looks, that is the answer to a question you should be asking.
Stock-level tax loss harvesting
Fund-level harvesting runs out of losses. Stock-level harvesting does not.
A robo-advisor holding six ETFs can only harvest when one of those six funds is below what you paid. In a year when the S&P 500 finishes up 20%, an S&P 500 ETF bought at the start of the year offers nothing at all. Every position is a gain.
The same index held as 500 individual stocks is a completely different picture. Roughly 200 of those companies will have fallen over the year even while the index rose, and each one is an independent harvestable loss. That is the entire mechanical argument for direct indexing, and it shows up in the published numbers. Frec reports historical harvest rates by strategy, and the spread is wide: about 16% of the portfolio on its semiconductor strategy, 25% on the S&P 500, 44% on small caps and 55% on the Russell 2000. Wealthfront's own whitepaper puts the harvesting yield on its US stocks at 3.61% against 2.60% for an ETF-only approach, a 1.01% advantage.
That gap is why the fee ladder looks the way it does. Betterment and Vanguard Digital Advisor sit at 0.20% to 0.25% for fund-level harvesting. Fidelity and Schwab charge 0.40% for stock-level harvesting inside a managed account. And Wealthfront and Frec charge 0.09% for stock-level harvesting on the S&P 500, which is close enough to an ETF expense ratio that the traditional argument about cost has largely collapsed. The full direct indexing fee comparison lays out all fourteen published rates side by side.
There is a ceiling, though. Harvesting depletes itself: as positions are sold at a loss and replaced, the account's cost basis drops, and after several strong years there is very little left to harvest. Vanguard's own filing warns that "over time, the ability of an investor in a tax-managed strategy to harvest losses may decrease and gains may build up." Anyone quoting a first-year harvest rate as an ongoing yield is misleading you. We wrote about what happens when a direct indexing account runs out of losses separately.
Tax loss harvesting benefit
What the research actually claims, with the period attached
These four estimates get quoted constantly without their conditions, which is how "1% to 2%" became a marketing number. The conditions matter more than the figure.
| Source | Stated benefit | Conditions and period |
|---|---|---|
| Wealthfront whitepaper | 0.18% to 0.44% a year of account value on the US stocks portion | Backtest, Feb 4 2015 to Dec 31 2025, marginal rates of 18% to 44% |
| Vanguard Personalized Indexing | Up to 1% to 2% or more a year in after-tax alpha | 2022 simulation, data as of Sept 2021, only for clients who regularly realize large capital gains |
| J.P. Morgan Asset Management | About 30 bps of extra annualized tax alpha from daily rather than monthly scanning | 16 scenarios, 2018 to 2021 |
| Elm Wealth | No annual figure. Sector-ETF harvesting captures roughly 70% of what full direct indexing could generate, and fees "can completely eliminate" the benefit | Analytical |
Notice what Vanguard attaches to its own headline figure: it applies to clients who regularly realize large capital gains from active managers, hedge funds or the sale of low-basis stock. Aperio's filing puts the same caveat in writing, saying the after-tax benefit "presumes that clients have capital gains from active managers, hedge funds, sale of low-cost-basis stock, or other sources suitable for offset." A harvested loss with nothing to offset is worth at most $3,000 a year against ordinary income under IRS Topic 409. Everything above that waits in a carryforward until you sell something at a profit. If you do have a gain coming, our capital gains tax calculator prices what harvesting removes from that specific bill, which is the only version of this arithmetic that means anything.
Wash sale rule and harvesting software
No harvesting software can see the account that will disallow your loss
Every product in the table monitors wash sales inside the account it manages. None of them can see your other accounts, and the wash sale rule under IRC section 1091 does not care about account boundaries. Schwab publishes the clearest admission of this: it "does not monitor for wash sales in other accounts held by a client, and as a result wash sales may occur from trading in multiple accounts held by a client, including multiple SPI accounts held by the same client."
The version that costs real money involves a retirement account. Under IRS Revenue Ruling 2008-5, if you sell a security at a loss in your taxable account and buy a substantially identical one inside your IRA within the 61 day window, the loss is disallowed and your IRA basis is not increased to compensate. In an ordinary wash sale the disallowed loss is added to the basis of the replacement shares, so it comes back later. In the IRA case it does not come back at all. It is gone, and you can price exactly what that costs with our wash sale calculator. A 401(k) with an automatic biweekly payroll contribution into an S&P 500 fund is buying substantially identical shares twenty six times a year, and your direct indexing provider has no visibility into any of it.
Parametric and Aperio both disclose that they can trigger wash sales themselves. Aperio's filing says that although it tries to avoid them, a wash sale "may be triggered by Aperio under a number of conditions including managing tracking error and client requests such as deposits or withdrawals." Aperio adds a second trap worth knowing about before you sign: the strategy depends on your custodian defaulting to High Cost In, First Out lot relief, and the filing states that "Aperio has no responsibility to ensure that the custodian correctly implements the appropriate tax lot relief method." Most custodians default to FIFO, which sells your lowest-basis lots first and is exactly backwards for harvesting, a difference you can price on any position with our cost basis calculator. The mechanics of all of this are covered in our guide to the wash sale rule and the $3,000 limit.
Best tax loss harvesting software by situation
Match the product to the tax problem you actually have
You have no realized gains
Buy nothing. Your entire benefit is capped at $3,000 a year against ordinary income, worth about $1,110 at a 37% marginal rate, and a 0.40% fee on a $200,000 account is $800 before the harvesting has done anything. A plain ETF wins.
You have a taxable account under $50,000
Wealthfront S&P 500 Direct at 0.09% from $5,000 is the only stock-level option priced like an ETF at that size. Schwab Intelligent Portfolios will not harvest for you at all below $50,000, whatever else the account does.
You want an index other than the S&P 500
Frec runs 25 strategies from 0.09% to 0.35%, including the small-cap and Russell benchmarks that historically harvest most. Fidelity offers five index strategies, Schwab six, Wealthfront two standalone. The menu is the real constraint.
You sold a business or exercised equity
This is the case the research assumes. A large realized gain is exactly what makes 1% to 2% of after-tax alpha plausible, because there is something for the losses to offset. Above $250,000 the adviser channel and its 20 to 35 bps manager rates become relevant.
You hold one concentrated position
Harvesting alone will not move the needle against a position that is most of your net worth. Look at exchange funds and their seven year lockup alongside a long/short harvesting strategy before paying for a standard index account.
You advise clients
The manager rate is the small number. Platform and advisory layers stack on top, and on Morgan Stanley Select UMA that reaches a 2.0% maximum annual advisory fee plus an SMA manager fee of up to 0.75% before your own billing.
Tax loss harvesting software questions
What people ask before they pick a harvesting provider
What is the best tax loss harvesting software?
There is no single best one, because the products are not comparable. If you want harvesting on individual stocks, Wealthfront S&P 500 Direct and Frec Classic both charge 0.09% and start at $5,000 and $20,000. If you want it bundled into a managed portfolio of funds, Vanguard Digital Advisor costs 0.20% from $100 and Schwab Intelligent Portfolios charges nothing extra but needs $50,000 before harvesting can be switched on. Above roughly $250,000 with a real tax problem, the adviser channel opens up.
Does Fidelity have a tax loss harvesting tool?
Not as a standalone tool you can point at your own holdings. Fidelity applies harvesting inside its managed accounts, and its own wording on Managed FidFolios is that "tax-smart investing strategies, including tax-loss harvesting, are applied in managing certain taxable accounts on a limited basis, at the discretion of the portfolio manager." That is a manager judgment call rather than a daily algorithm, which is a meaningful difference from Wealthfront or Vanguard Personalized Indexing.
Does Vanguard do tax loss harvesting?
Yes, in two different products. Vanguard Digital Advisor includes tax-loss harvesting at no additional cost on eligible taxable accounts, with a $100 enrollment minimum and a 0.20% annual gross advisory fee for an index portfolio, and it harvests at the fund level. Vanguard Personalized Indexing is the separate direct indexing product sold through advisers, and its Form ADV describes an automated "TLH Algorithm" that identifies opportunities and initiates the buy and sell orders itself.
Does Schwab do automatic tax loss harvesting?
Yes, but you have to turn it on and clear a balance test. Schwab states that "if you have an account with $50,000 or more in assets, and you've elected to automate tax-loss harvesting, your account will be tracked daily for opportunities", and separately that "you must be enrolled for tax-loss harvesting to occur." There is no additional fee for it. Roundups that quote a $5,000 figure are quoting the account minimum, not the harvesting minimum.
Is automated tax loss harvesting worth it?
It is worth paying for only if you have capital gains to offset. Published estimates of the annual benefit range from 0.18% to 0.44% of account value in Wealthfront's own backtest to 1% to 2% in Vanguard's simulation, and Vanguard is explicit that its figure applies to clients who regularly realize large gains. Against ordinary income the deduction is capped at $3,000 a year. If your taxable account is small and you rarely sell anything at a profit, a 0.40% fee will usually cost more than the harvesting returns.
What is the difference between ETF-level and stock-level tax loss harvesting?
ETF-level harvesting can only act when the whole fund is below your cost basis. Stock-level harvesting owns the constituents directly, so it can sell the individual names that fell in a year when the index rose. That is why direct indexing accounts report far higher cumulative harvest rates: Frec publishes historical figures from 16% of the portfolio on a semiconductor strategy to 55% on the Russell 2000, against a market where the index itself was up.
Can tax loss harvesting software see wash sales in my other accounts?
No, and this is the most expensive gap in the category. Schwab discloses it plainly: it "does not monitor for wash sales in other accounts held by a client, and as a result wash sales may occur from trading in multiple accounts held by a client." Worse, under IRS Revenue Ruling 2008-5, if the replacement shares are bought inside your IRA, the loss is disallowed and your IRA basis is not increased, so the deduction is lost permanently rather than deferred.
How much can tax loss harvesting save on taxes each year?
Harvested losses first offset realized capital gains with no dollar limit. Only the leftover net loss is capped, at $3,000 a year against ordinary income, or $1,500 if married filing separately, with the remainder carried forward indefinitely. At the top federal long-term rate of 23.8%, offsetting $50,000 of gains is worth about $11,900 deferred. Offsetting nothing and taking the $3,000 deduction at a 37% rate is worth $1,110.
Does Betterment offer direct indexing tax loss harvesting?
No. Betterment harvests at the ETF level inside its managed portfolios, not on individual stocks, and a check of betterment.com/pricing on August 26, 2026 found zero occurrences of the phrase "direct index". Betterment does publish a useful figure on its harvesting: "nearly 70% of customers using tax-loss harvesting covered their taxable advisory fees through estimated tax savings."
Do I still need tax loss harvesting software if I only hold index funds?
Probably not, and this is worth being honest about. A single broad index fund gives harvesting software very little to work with, because the only lever is selling the whole position when the market is down and buying something similar but not substantially identical. That is a handful of trades a decade, and you can do it yourself. Harvesting software earns its fee when the account holds hundreds of individual positions that move independently.
Sources
Retail figures retrieved directly from each provider on the dates shown: intelligent.schwab.com/page/tax-loss-harvesting and investor.vanguard.com/advice/digital-advisor and betterment.com/tax-loss-harvesting and betterment.com/pricing (August 26, 2026), wealthfront.com and frec.com/pricing (August 26, 2026), schwab.com/personalized-indexing (August 11, 2026), fidelity.com/managed-accounts/managed-fidfolios (August 10, 2026). Adviser-channel language and fee schedules transcribed from Form ADV Part 2A firm brochures retrieved from the SEC's Investment Adviser Public Disclosure system: Parametric Portfolio Associates dated 03/31/2026; Vanguard Personalized Indexing Management, CRD 285366, brochure version 1052606 dated 07/22/2026; Aperio Group LLC, CRD 111616, brochure version 1036178 dated 03/31/2026. Platform fee stack from Morgan Stanley Select UMA strategy profiles, Q2 2026. Tax alpha figures from the Wealthfront tax loss harvesting whitepaper, Vanguard Personalized Indexing published materials, J.P. Morgan Asset Management and Elm Wealth, each with its stated period. Tax rules from IRS Topic 409, IRC section 1091 and IRS Revenue Ruling 2008-5. Fees and disclosures change at every pricing update and every annual ADV amendment, so verify before you sign anything. Indexes is not affiliated with, endorsed by or sponsored by any provider named on this page. We are index construction and backtesting software: we do not manage money, place trades, custody assets or provide tax or investment advice.
Decide what you want held before you pay anyone to harvest it
Harvesting is a service applied to a portfolio. The portfolio comes first. Design the index membership and the weighting, exclude what you do not want to own, and test the construction against real market history, so the conversation about basis points starts from something you actually chose.
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