Tax-Loss Harvesting Calculator
See how much you can save by harvesting investment losses: net your short-term and long-term capital gains, apply the $3,000 ordinary-income offset, and check your loss carryforward, all at 2026 federal tax rates.
Tax-Loss Harvesting Calculator
Filing Status
Realized Capital Gains
Gains you have already realized this year, before applying any harvested losses.
Losses Available to Harvest
Unrealized losses in your portfolio you are considering selling.
Prior-Year Carryover
Capital loss carryover from last year's Schedule D (optional).
Ordinary Income Marginal Rate
Used for short-term gains and the $3,000 offset. Not sure? Check the Tax Bracket Calculator.
Total Taxable Income
Used to pick your long-term capital gains rate (0%, 15%, or 20%).
State Capital Gains Rate
Optional. Enter 0 if your state has no income tax.
Wash sale rule: A loss is disallowed if you buy a substantially identical security within 30 days before or after the sale (a 61-day window). This calculator assumes your harvested losses are not wash sales. Crypto is treated as property, so the wash sale rule does not currently apply to crypto losses.
Estimates only, at 2026 federal rates. Does not include the 3.8% Net Investment Income Tax. Not tax or legal advice.
See the Harvest in Your Full Return
Tax47 builds your whole return from real W-2 and 1099 data, with capital gains, deductions, and credits applied for you.
How tax-loss harvesting lowers your tax bill
Tax-loss harvesting means selling investments that have dropped in value so the loss can cancel out taxable gains elsewhere in your portfolio. The IRS sets a fixed netting order in Topic 409 and the Schedule D instructions, and that order decides how much you actually save.
Losses first net against gains of the same type. Short-term losses offset short-term gains, and long-term losses offset long-term gains. If one category ends up a net loss and the other a net gain, the leftover loss then offsets the other category. Only after all gains are absorbed can a remaining net loss reduce up to $3,000 of ordinary income.
Here is a worked example that follows the calculator. Say you have $5,000 of short-term gains, $8,000 of long-term gains, $6,000 of short-term losses, and $4,000 of long-term losses. Short-term nets to a $1,000 loss; long-term nets to a $4,000 gain. The $1,000 short-term loss then offsets the long-term gain, leaving $3,000 of net long-term gain still taxable. The harvest canceled $10,000 of gains, and at a 22% ordinary rate plus a 15% long-term rate, the tax saved adds up fast.
The $3,000 deduction and capital loss carryforward
When your losses are larger than your gains, you have a net capital loss. Under 26 U.S.C. Section 1211(b), that net loss can offset up to $3,000 of ordinary income per year, such as wages or self-employment income. The limit drops to $1,500 if you file Married Filing Separately, and the calculator applies that cap for you.
Anything beyond the yearly limit is not lost. IRS Publication 550 explains that excess net capital losses carry forward indefinitely. The carryover keeps its short-term or long-term character and shows up again on next year's Schedule D, where you report it on the carryover lines. There is no expiration, so a large loss can shelter gains for many years.
Wash sale rule: the mistake that cancels your harvest
The wash sale rule (IRC Section 1091) disallows a loss if you buy a substantially identical security within 30 days before or after the sale. That is a 61-day window centered on the trade. The disallowed loss is not gone for good: it is added to the cost basis of the replacement shares, but the immediate tax benefit disappears.
A common workaround is to buy a similar but not identical fund (for example, a different provider's broad-market index fund) so you keep market exposure without triggering the rule. Cryptocurrency is treated as property rather than a security, so the wash sale rule does not currently apply to crypto losses, which is why crypto holders can harvest and rebuy on the same day. See the Crypto Tax Calculator for crypto-specific estimates.
2026 capital gains tax rates and timing
Short-term gains, from assets held one year or less, are taxed as ordinary income at rates from 10% to 37%. Long-term gains, from assets held more than a year, are taxed at 0%, 15%, or 20% depending on your taxable income and filing status. For 2026, the 0% long-term rate applies up to $49,450 for single filers and $98,900 for joint filers, with the 20% rate kicking in above roughly $545,500 single and $613,700 joint (IRS Rev. Proc. 2025-32).
Timing matters because a trade must settle in the calendar year to count for that tax year. Year-end is the natural harvesting window, but waiting until the final session leaves no room for error. Harvesting also feeds into your broader return: the offset gains and the $3,000 ordinary deduction flow through to your taxable income and your refund. To model that full picture, you can download Tax47 and watch the estimate update as you add each form.
Frequently Asked Questions
Common questions about tax-loss harvesting calculator
How does a tax-loss harvesting calculator work?
It follows the IRS netting order from Topic 409. First it nets short-term losses against short-term gains and long-term losses against long-term gains. If one bucket ends up a net loss and the other a net gain, the leftover loss offsets the other bucket. Any remaining net loss offsets up to $3,000 of ordinary income, and the rest carries forward. The calculator then estimates the tax saved by valuing each offset at the rate that income would have been taxed at.
Can I deduct capital losses against my salary or other ordinary income?
Yes, but only after losses have offset all of your capital gains. Once gains are canceled out, a net capital loss can reduce up to $3,000 of ordinary income (such as wages) per year under 26 U.S.C. Section 1211(b). Anything above that limit carries to future years instead of being lost.
What is the $3,000 capital loss deduction limit, and is it different if I'm married filing separately?
The yearly limit for offsetting ordinary income with a net capital loss is $3,000. If you file Married Filing Separately, the limit is $1,500. The calculator applies the $1,500 cap automatically when you pick that filing status.
What happens to losses that exceed the $3,000 limit, do I lose them?
No. Net capital losses above the $3,000 ($1,500 MFS) yearly limit carry forward indefinitely. The carryover keeps its short-term or long-term character and gets reported on Schedule D the following year. There is no expiration date, so unused losses stay available until they are fully used up.
What is the wash sale rule and how does it affect tax-loss harvesting?
Under IRC Section 1091, a loss is disallowed if you buy a substantially identical security within 30 days before or after the sale, a 61-day window. The disallowed loss is added to the cost basis of the replacement shares. This calculator assumes your harvested losses are not wash sales. To stay clear, avoid repurchasing the same security and consider a similar but not identical fund instead.
Are short-term or long-term losses more valuable to harvest?
Short-term losses are usually worth more because they first offset short-term gains, which are taxed at ordinary rates as high as 37%. Long-term gains are taxed at 0%, 15%, or 20%, so a long-term loss offsetting a long-term gain saves less per dollar. Keep the netting order in mind to get the most out of a harvest.
Does the wash sale rule apply to cryptocurrency?
Right now, no. The IRS treats cryptocurrency as property rather than a security, so the wash sale rule under Section 1091 does not apply to crypto losses. You can sell crypto at a loss and rebuy it the same day, though proposed legislation could change this. See the Crypto Tax Calculator for crypto-specific estimates.
When is the deadline to harvest losses for the 2026 tax year?
Trades must settle by the last business day of 2026 to count for that tax year. Realized losses are based on the trade date, so sell before the market closes on December 31, 2026. Year-end is the busiest harvesting window, so don't wait until the final session.