How to track tax loss harvesting carryover across multiple years?

Thanks for the explanation! That's a relief that the software tracks it. So as long as I use the same software and import last year's return, it should automatically know how much of my $27k loss is still remaining? I didn't realize there was a specific Capital Loss Carryover Worksheet - I'll make sure to save copies of that and Schedule D each year. Would it be on the actual tax forms or somewhere else in the final tax package?

The software will definitely track your remaining loss carryover as long as you import the previous year's return correctly. That's why it's important to not switch between different tax programs if possible. The Capital Loss Carryover Worksheet is usually found in the Schedule D instructions, not as a separate form you file. When you complete your taxes, most software will generate this worksheet as part of your tax return package. It's normally listed in the same section as your Schedule D in the PDF of your completed return. Just save the full PDF of your return each year and you'll have everything you need.

How does it handle situations where you have both short-term and long-term losses? My broker generates like 50 pages of transactions and I'm getting confused about how different types of losses get prioritized when carrying over.

Does it actually connect to your tax software somehow? Or do you have to manually enter all your tax info again? I've been using TurboTax for years and don't want to have to re-enter everything somewhere else.

The system handles both short-term and long-term losses correctly, following the IRS rules where short-term losses first offset short-term gains, and long-term losses first offset long-term gains. Then net losses from one category can offset gains in the other. It even correctly sequences the carryover into future years maintaining their character as short or long-term. You don't need to manually enter everything again. You can simply upload your tax return PDFs from previous years, and taxr.ai extracts all the relevant information automatically. It works alongside your existing tax software rather than replacing it - I still use TurboTax for filing, but use taxr.ai for tracking and planning throughout the year.

How does this service work exactly? Is it just connecting you to the regular IRS phone line or do they have some special access? I've tried calling the IRS about my tax loss harvesting questions and just get stuck on hold forever.

Seems sketchy that they could get you through to the IRS faster than normal channels. The IRS phone system is the same for everyone. I'm guessing they're just charging money for something you could do yourself if you just keep calling.

It connects you to the same IRS phone line everyone else uses, but their system navigates the complex IRS phone tree for you and constantly redials until it gets through. When a slot opens up, their system puts you through immediately. It's just automating the frustrating process of constantly redialing and working through the menu options. They don't have special access - they're just using technology to solve the problem of getting through the overwhelmed phone system. And honestly, the time I saved was worth it after spending days trying to get through on my own. I was able to speak with someone who actually explained my specific carryover situation rather than just trusting what I thought the software was doing.

I didn't even consider state tax implications! I'm in California - do you know if they follow the same federal rules for capital loss carryovers or should I be looking into this separately?

California generally follows the federal rules for capital loss carryovers, so you're in luck! They use the same $3,000 limit against ordinary income and allow unlimited carryover of unused losses to future years. Some states have their own quirks though. For example, New Jersey doesn't allow losses to offset ordinary income at all, and Pennsylvania only allows losses to offset gains (no deduction against ordinary income). That's why it's always good to check your specific state's rules. But for California, your federal calculations should work fine for state purposes too.

But if you already have $27k in carryover losses like OP, does it make sense to harvest more? Wouldn't that just extend how many years it takes to use them all up?

Good point about strategic harvesting, but @Nia Davis raises a valid concern. With $27k already in carryover, harvesting additional losses might not be the best move unless you re'expecting significant capital gains in the near future that would offset them. The key is to think about your overall tax strategy - if you re'likely to have gains from rebalancing or selling appreciated positions over the next few years, then additional harvesting could make sense to offset those gains dollar-for-dollar. But if you re'mostly in accumulation mode without much selling, you might just be extending the timeline to use up your existing carryover. One middle-ground approach is to harvest losses only when you have gains in the same tax year, so they offset immediately rather than adding to your carryover pile.