Free for 90 days: Sign up now and get 90 days managed free after your first deposit. See offer details


Hoverboard Header

Experience the next generation of tax loss harvesting

Advanced tax-saving strategy

What is Tax Loss Harvesting?

Tax loss harvesting is the practice of selling a security that has experienced a loss. By realizing, or "harvesting" a loss, investors are able to offset taxes on both gains and income. The sold security is replaced by a similar one, maintaining an optimal asset allocation and expected returns.

The upside to capital losses.

Realized losses on investments can offset gains and reduce ordinary taxable income by as much as $3,000 per year.

Making it accessible.

Tax Loss Harvesting+ is automated and available at no additional cost to investors who are managing money with us.

Optimizing the strategy.

Tax Loss Harvesting+ looks for opportunities to harvest regularly and can reduce tax exposure better than other automated harvesting tools.

Additional after‑tax returns with Tax Loss Harvesting+ in a taxable account

Assumes an initial investment of $50,000 at a 70% stock allocation, with bimonthly incremental deposits of $750. About this data

See how Tax Loss Harvesting+ compares

Tax Loss Harvesting+
Traditional TLH

Automated algorithm that checks regularly

Betterment TLH+ checks daily for harvesting opportunities.

Tax Loss Harvesting+
Traditional TLH

No extra trading costs to harvest losses

All harvest transactions are covered by your Betterment management fee.

Tax Loss Harvesting+
Traditional TLH

Every harvested dollar reinvested

Some tax loss harvesting methods avoid reinvesting dividends and hold cash deposits until after wash periods have passed, for simplicity. Our algorithm is built to handle this complexity, so your portfolio will never hold cash. Tax Loss Harvesting+ is specifically optimized to allow you to always be invested while navigating wash sales.

Tax Loss Harvesting+
Traditional TLH

No short-term capital gains tax, ever

Some tax loss harvesting methods switch back to the primary ETF after the 30-day wash period has passed. This can create short-term capital gains tax that may dramatically reduce the benefit of harvesting losses and even leave you owing more tax. Our algorithm only moves back to the primary ETF when it is appropriate for your account.

Tax Loss Harvesting+
Traditional TLH

IRA harvest protection

Selling an ETF for a loss in your taxable account, and then buying the same ETF in your IRA, can cause a permanent wash sale, destroying the benefit of loss harvesting entirely. We guarantee that IRA deposits will never undermine a harvest.

Tax Loss Harvesting+
Traditional TLH

Harvests rebalance

When shares are sold at a loss, the proceeds are intelligently reinvested in the asset classes that will bring your portfolio back into balance, rather than simply defaulting back to the asset class they came from. Betterment trades in fractional shares, which allows our algorithms to harvest and rebalance every penny of your account for maximal potential tax benefit.

Tax Loss Harvesting+
Traditional TLH

Customer-realized losses protected

Tax Loss Harvesting+ minimizes wash sales, directing cash in‑flows into parallel assets. The system protects not just harvested losses, but also any losses realized by the customer.

Tax Loss Harvesting+
Traditional TLH

Explore your first goal

Safety Net

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.

General Investing

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.

Smart Saver

You could earn 20X more than a typical savings account with our low-risk investing account for your extra cash.

Are you on track for retirement?

Try our retirement calculator to see if you're retirement-ready.

Could your 401(k) be worth more?

Learn how rolling over an average 401(k) to a Betterment IRA could mean 60% lower fees.

Want more retirement guidance?

Read the latest on investing for retirement on our Resource Center.


To estimate additional gains of $44,692 (annualized at 0.77%), we used IRR to calculate the excess return of a portfolio with TLH+ as compared to a baseline Betterment portfolio, both with a constant 70% stock allocation. We assumed an initial $50,000 investment, and twice monthly auto-deposits of $750, escalated 5% annually (to account for inflation and salary increases). We assumed a single California resident (where Betterment has the most customers) making $100,000/year (federal: 28% on income, 15% on LTCG; state: 9.3%). We assumed no short-term capital gains for offset: just long-term capital gains and ordinary income (a more conservative assumption). All dividends and tax savings were reinvested into the portfolio. At the end of the period, we assumed a taxable liquidation of 50% for both portfolios. For more detail, including results under different assumptions, see our white paper. For example, assuming maximum California tax rates, short-term capital gains for offset, and no liquidation, the benefit would have been 1.40%.

The analysis that produced this estimate was done over the 13-year period from 2000 to 2013. No reliable data was available prior to 2000 that could adequately represent the performance of the full Betterment portfolio. Past performance is no guarantee of future results. The information used as the foundation for historical backtesting was compiled from third-party sources, and while we believe the information provided here is reliable, we do not warrant its accuracy or completeness. For more on how we backtest against historical data, see here.

The analysis is not based on actual client trading history, and actual Betterment clients may experience different results. Factors which will determine the actual benefit of TLH+ include, but are not limited to, market performance, the size of the portfolio, the stock exposure of the portfolio, the frequency and size of deposits into the portfolio, the availability of capital gains and income which can be offset by losses harvested, the tax rates applicable to the investor in a given tax year and in future years, the extent to which relevant assets in the portfolio are donated to charity or bequeathed to heirs, and the time elapsed before liquidation of any assets that are not disposed of in this manner.

Tax loss harvesting is not suitable for all investors – especially those in low income tax brackets. Nothing herein should be interpreted as tax advice, and Betterment does not represent in any manner that the tax consequences described herein will be obtained, or that any Betterment product will result in any particular tax consequence. Please consult your personal tax advisor as to whether TLH+ is a suitable strategy for you, given your particular circumstances. The tax consequences of tax loss harvesting are complex and uncertain and may be challenged by the IRS. You and your tax advisor are responsible for how transactions conducted in your account are reported to the IRS on your personal tax return. Betterment assumes no responsibility for the tax consequences to any client of any transaction.


Search our site