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Tax Gain Harvesting

and How You Can Use it to Your Advantage

Tax-Gain Harvesting and How You Can Use it to Your Advantage

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Rallys within the stock market are great for profit, but with profit along comes taxes. Using Tax-Gain Harvesting as a tool can help lower taxes, and here is everything you need to know about it.

Tax-gain harvesting is for those who fall into the capital gain tax bracket of 0%. This affects assets owned for over a year or long-term capital gains. The rates apply to your taxable income. Determine which is greater, the standard or itemized deductions and then subtract that from your adjusted gross income. That gives you your taxable income. For 2023 capital gains brackets, check out the chart:

Single Filers

RateTaxable Income
0%$0 – $44,625
15%$44,626 – $492,300
20%$492,301 or Higher

Married Filing Jointly

RateTaxable Income
0%$0 – $89,250
15%$89,251 – $553,850
20%$553,951 or Higher

Taking advantage of tax-gain harvesting in the 0% bracket can help “adjust the basis” on your asset. It is important to look at state capital gain taxes because those may differ from the federal. Starting on tax-gain harvesting now can reduce some of your future taxable gains.

Wash sale rules as we know them, don’t apply to harvested gains. This means you can instantly repurchase the same asset right after you sell it. This gives an advantage because it adjusts the basis.

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