Tax-Loss Harvesting
Category: Investment
Selling investments at a loss to offset capital gains, with up to $3,000 ($1,500 MFS) of net loss deductible against ordinary income annually and the rest carried forward.
How Tax-Loss Harvesting fits 2026 planning
Tax-Loss Harvesting sits inside capital gains, dividends, wash-sale timing, and surtaxes such as NIIT that sit beside ordinary brackets. For tax year 2026, US Tax Tools treats year-scoped constants (brackets, contribution limits, wage bases, credit schedules) as separate datasets — so explanations of Tax-Loss Harvesting should be read with the same year selected in any linked calculator.
Category focus: Investment. Readers usually land on this page while comparing a paycheck estimate, a credit phaseout, or a retirement contribution room figure that depends on understanding Tax-Loss Harvesting first.
Worked example
Harvesting $12,000 of losses against $5,000 of gains leaves $7,000 of net loss—$3,000 against ordinary income and $4,000 carried forward.
Treat the example as a teaching sketch, not a filing position. Change filing status, state residency, or mid-year events and the same definition of Tax-Loss Harvesting can produce a different cash outcome even when the glossary text stays the same.
What to watch for
Definitions of Tax-Loss Harvesting can differ slightly across IRS publications, SSA rules, Marketplace subsidy worksheets, and state agencies. When two programs both say “income,” confirm which modification rules apply — MAGI for one credit is not always MAGI for another.
Legislation and inflation adjustments can move the dollar thresholds around Tax-Loss Harvesting without renaming the concept. Prefer the effective date on the primary source (Rev. Proc., SSA notice, USDA table, or state DOR bulletin) over any blog summary — including this one if a later notice supersedes it.
Confirm how Tax-Loss Harvesting appears on your forms by reading the IRS instructions for the schedules that match your facts. Educational definitions here cannot capture every exception or state overlay.
Next step
When you are ready to model numbers, open the Tax-Loss Harvesting related calculator on US Tax Tools. Engines keep tax-year datasets separate so a 2025 habit does not silently reuse a 2026 constant.
Related reading: Tax insights for longer 2026 explainers, Methodology for how engines store cents and traces, and Disclaimer for educational-use limits.