The tax harvesting feature can be worth it for many people.
- There can be diminishing returns with higher balances and over time, since one can ordinarily deduct a net of $3000 from income a year and carry forward further losses, so one may at some point be carrying forward losses every year and only deduct $3000 from income. However the fee would continue to grow proportional to the balance. It may make sense to reevaluate whether the service is still worth the fee once one has several years of losses to carry forward.
- Depending on how much effort one wants to put in, one may be able to get much of the benefits of tax loss harvesting by doing it oneself.
- One may have significant balances in tax advantaged accounts. If those are managed by Wealthfront, one may not be able to get the benefits of tax loss harvesting on those balances.
- There can be diminishing returns with higher balances and over time, since one can ordinarily deduct a net of $3000 from income a year and carry forward further losses, so one may at some point be carrying forward losses every year and only deduct $3000 from income. However the fee would continue to grow proportional to the balance. It may make sense to reevaluate whether the service is still worth the fee once one has several years of losses to carry forward. - Depending on how much effort one wants to put in, one may be able to get much of the benefits of tax loss harvesting by doing it oneself. - One may have significant balances in tax advantaged accounts. If those are managed by Wealthfront, one may not be able to get the benefits of tax loss harvesting on those balances.