Estimate how much you can save by strategically selling losing investments to offset capital gains and reduce your tax bill.
Tax-loss harvesting lets you sell investments at a loss to offset capital gains. Losses first offset gains of the same type (short-term losses offset short-term gains first). Excess losses can offset up to $3,000 of ordinary income per year ($1,500 if married filing separately), with remaining losses carried forward indefinitely. Be aware of the wash sale rule: you cannot buy the same or substantially identical security within 30 days before or after the sale.