Tax loss harvesting is the practice of selling an asset that has experienced a loss. The sold asset is replaced by a similar one, helping to maintain your risk level and your expected returns. By realizing, or “harvesting” a loss, you can:
- Offset taxes on realized capital gains.
- Reduce tax liability by reducing your income.
You could benefit from Tax Loss Harvesting+ if…
- You are investing in a taxable investment account.
- You plan to donate to charity or leave your assets to your heirs.
- The IRS allows you to offset your realized capital gains with realized capital losses.
- The IRS allows you to reduce up to $3,000 from your ordinary income.
We don’t recommend Tax Loss Harvesting+ if…
- Your future tax bracket will be higher than your current tax bracket.
- You can currently realize capital gains at a 0% tax rate.
- Under current law, this may be the case if your taxable income is below $39,375 as a single filer or $78,750 if you are married filing jointly.
- You are planning to withdraw a large portion of your taxable assets in the next 12 months.
- You risk causing wash sales due to having substantially identically investments elsewhere.
How We Use Your Dividends To Keep Your Tax Bill Low
Every penny that comes into your account is used to rebalance dynamically—and in a tax-savvy way.
Acceptable Reasons for Holding Unused Cash in Smart Saver
When you aren't yet sure when or how to spend or invest your unused cash, we offer Smart Saver, a managed account designed to handle your extra cash.
The Benefits of Tax Loss Harvesting+
We’ve automated tax loss harvesting which can help you save on taxes over time.
Explore your first goal
This is a great place to start—an emergency fund for life's unplanned hiccups. A safety net is a conservative portfolio.
Whether it's a long way off or just around the corner, we'll help you save for the retirement you deserve.
If you want to invest and build wealth over time, then this is the goal for you. This is an excellent goal type for unknown future needs or money you plan to pass to future generations.