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Tax-Loss Harvesting Scenario Calculator

Model how investment losses can offset capital gains, reduce ordinary income, and create tax-deferred carryforwards for investors managing portfolio tax efficiency.

Quick answer: Tax-loss harvesting can offset capital gains first, then up to $3,000 of ordinary income per year. Extra losses generally carry forward, subject to wash-sale rules.

SWReviewed by SwitchWize Research Desk · Last reviewed July 21, 2026
Estimated Current-Year Tax Effect
$2,870
Estimated Current-Year Tax Effect
$2,870
Losses Applied Against Entered Gains
$10,000
Net Loss After Entered Gains
$5,000
Loss Applied Against Ordinary Income
$3,000
Simplified loss use
Simplified Loss Carryforward
$2,000
Diagnostic

The modeled current-year tax effect is $2,870, using $10,000 against gains and $3,000 against ordinary income.

The simplified carryforward is $2,000. Verify capital-gain character and netting order before acting.

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What to do next

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Your action plan
  1. 1

    Calculate the baseline result with your current numbers

    Screen how entered investment losses may offset gains, ordinary income, and future years.

  2. 2

    Check the assumptions before using the result for a high-stakes decision

    Assumptions change the answer, especially when rates, taxes, or timing matter.

  3. 3

    Save the result to Money Map or use the linked next action

    Turn the result into a prioritized action instead of treating it as a one-off number.

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This is an educational estimate, not tax, legal, investment, or lending advice. Tax rules, rates, and eligibility change and depend on your full situation. Confirm with a qualified professional or the provider before acting.

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Frequently Asked Questions

Everything you need to know.

What does an example Tax-Loss Harvesting Scenario Calculator calculation look like?
Using this calculator's own default assumptions, a realized capital gains to offset of $10,000, investment losses available of $15,000 and entered combined tax rate on offset gains of 20% produces an estimated estimated current-year tax effect of $2,870 and losses applied against entered gains of $10,000. Enter your own numbers above to see how it changes for your situation.
Why does the calculator show losses going against gains first, then ordinary income?
Tax law requires capital losses to offset capital gains before they can offset ordinary income. Since capital gains often have a lower tax rate than ordinary income, this ordering matters: losses eliminate high-rate gains before reducing ordinary income, which can mean less overall tax benefit. The calculator respects this priority to show your realistic tax outcome.
What happens to losses I can't use this year?
Capital losses that exceed the annual deduction limit carry forward to future years indefinitely, subject to the same rules: they offset future gains first, then ordinary income up to the annual limit. This carryforward is valuable because it preserves tax benefits you cannot use immediately, but the timing of when those benefits arrive depends on your future gains and income.
Is the Tax-Loss Harvesting Scenario Calculator free to use?
Yes. SwitchWize calculators are free, and you do not need an account to run scenarios or view the result.
Does using the Tax-Loss Harvesting Scenario Calculator affect my credit score?
No. Using a calculator does not trigger a credit check. A credit impact can occur only if you apply directly with a lender, card issuer, or provider.
Are the results personalized financial advice?
No. Calculator outputs are educational estimates based on the inputs you enter. Review assumptions and confirm terms directly with providers before making a financial decision.
What should I do after seeing the result?
Use the recommendation module on this page to compare top brokerage accounts, or run Money Map to compare this investing & retirement decision with your other opportunities.
How does SwitchWize choose related offers?
Related offers are matched by the calculator surface (brokerage) and ranked using SwitchWize data such as rate, fees, trust signals, product fit, and switching friction. Paid relationships do not change organic ranking order.
How fresh are the rates and offers shown?
Rate and offer data is reviewed on a recurring cadence and every offer module shows review context or links to the methodology and disclosure pages.
Where can I see the ranking methodology?
The SwitchWize methodology page explains how rate freshness, editorial review, affiliate disclosure, and category ranking factors work.
Can Money Map use this result?
Yes. Money Map is the broader diagnostic path: it compares savings, mortgage, cards, and debt so you can see whether this calculator result is your highest-impact next move.

Why This Matters

Tax-loss harvesting reduces your current-year tax liability by using investment losses strategically: first against capital gains (which are taxed at preferential rates), then against ordinary income up to an annual limit, with excess losses rolling forward indefinitely. Understanding how much of your available losses apply in the current year versus future years helps you plan whether to harvest losses now or defer the strategy. The interaction between your gains, income tax rates, and the annual loss limitation creates different tax outcomes depending on how you sequence and time these transactions.

How to Use It

  1. 1Enter your realized capital gains that you want to offset with losses.
  2. 2Enter the total investment losses available to harvest.
  3. 3Enter your combined tax rate (federal, state, local) that applies to capital gains.
  4. 4Enter your combined marginal tax rate (federal, state, local) that applies to ordinary income.
  5. 5Enter the maximum annual net capital loss you can deduct against ordinary income in the current year.
  6. 6Review the five outputs: losses applied against gains, remaining losses after gains, losses applied to ordinary income, losses carried forward to future years, and your estimated total tax savings this year.
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