TLH (6/7/2025)
Since writing last week about the big tax bill, I’ve had so many tax topics swirling in my mind. One that was remarkably relevant recently is the practice of tax loss harvesting. As a reminder, I am not a tax professional and this newsletter is designed for educational purposes. The following is not tax advice.
It may seem like a lifetime ago already, but do you remember if you were sweating when the S&P 500 dropped 12% back in early April—or were you quietly making your next tax-savvy move?
That market drop (thanks, tariffs) wasn’t just chaos—it was actually a gift for anyone paying attention. When your investments dip below what you paid for them, you can sell those losers and use the losses to lower your tax bill. That’s called tax-loss harvesting, and yes, it’s very useful.
Here’s the breakdown:
Losses can offset your gains (from any winners you sold, or will sell in the future)
No gains? You can deduct up to $3,000 from your regular income
Extra losses? You can roll them into future years—no expiration!
But—and this is a big but—don’t just sell and sit in cash. You need to stay invested to keep your long-term plan on track.
Here’s where the IRS gets nosy: If you buy the exact same thing within 30 days before or after the sale, it’s called a wash sale, and they’ll disallow the tax break. (Annoying, I know.) For example: sell the SPDR S&P 500 ETF and then buy the Vanguard S&P 500 ETF within the 30-day window? No go. Too similar.
So what do you do instead?
You swap into something close, but not identical. Like selling your S&P 500 ETF and buying a total stock market ETF instead. That move would have let you lock in a tax loss and catch the 9.5% bounce on April 9th, when markets jumped after a temporary tariff pause. Same market exposure, smarter tax outcome.
Moral of the story?
Market volatility isn’t always bad. Sometimes, it’s just an opportunity dressed in a little panic.
Lauren does not provide tax, legal or accounting advice. This newsletter has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
Before jumping in, I wanted to give you the opportunity to submit questions for an upcoming edition dedicated to Home Ownership. I will be interviewing licensed Real Estate agent Shakima Thimba and want to include your most burning questions. Please enter your submissions here: https://docs.google.com/forms/d/e/1FAIpQLSdncvUsUak4GSeuXzqYaXNFsTe3I1oxSxWLXAmVc1-B6NezVA/viewform?usp=header
Since writing last week about the big tax bill, I’ve had so many tax topics swirling in my mind. One that was remarkably relevant recently is the practice of tax loss harvesting. As a reminder, I am not a tax professional and this newsletter is designed for educational purposes. The following is not tax advice.
It may seem like a lifetime ago already, but do you remember if you were sweating when the S&P 500 dropped 12% back in early April—or were you quietly making your next tax-savvy move?
That market drop (thanks, tariffs) wasn’t just chaos—it was actually a gift for anyone paying attention. When your investments dip below what you paid for them, you can sell those losers and use the losses to lower your tax bill. That’s called tax-loss harvesting, and yes, it’s very useful.
Here’s the breakdown:
Losses can offset your gains (from any winners you sold, or will sell in the future)
No gains? You can deduct up to $3,000 from your regular income
Extra losses? You can roll them into future years—no expiration!
Reminder, this is relevant for your taxable investment accounts only, there are no taxable gains or losses in your retirement accounts
But—and this is a big but—don’t just sell and sit in cash. You need to stay invested to keep your long-term plan on track.
Here’s where the IRS gets nosy: If you buy the exact same thing within 30 days before or after the sale, it’s called a wash sale, and they’ll disallow the tax break. (Annoying, I know.) For example: sell the SPDR S&P 500 ETF and then buy the Vanguard S&P 500 ETF within the 30-day window? No go. Too similar.
So what do you do instead?
You swap into something close, but not identical. Like selling your S&P 500 ETF and buying a total stock market ETF instead. That move would have let you lock in a tax loss and catch the 9.5% bounce on April 9th, when markets jumped after a temporary tariff pause. Same market exposure, smarter tax outcome.
Moral of the story?
Market volatility isn’t always bad. Sometimes, it’s just an opportunity dressed in a little panic.
Wishing you good financial health.
