What does the Taxable Account toggle do?
Monthly rotation strategies generate realized capital gains, and in a taxable account those gains get taxed. The Taxable Account toggle estimates after-tax returns so you can see how a strategy holds up once the IRS takes its share.
When you enable it, a settings dialog collects:
- Filing status — Single, Married Filing Jointly, or Head of Household
- Taxable income (excluding strategy gains) — used to find your marginal brackets
- An optional manual override if you'd rather enter your own short-term and long-term rates directly (useful for adding state taxes)
From your filing status and income, your marginal ordinary-income rate (applied to short-term gains) and your long-term capital-gains rate are used based on the 2025 federal brackets, and adds the 3.8% Net Investment Income Tax when your income exceeds the NIIT threshold ($200K single/HoH, $250K MFJ).
How the tax is applied:
- Each strategy has a historical LT Gains % - the share of its realized gains that qualified for long-term treatment, taken from its Tax Efficiency analysis (see the Tax Efficiency FAQ).
- Your ST and LT rates are blended in that proportion into a single effective rate.
- For each calendar year with a net positive return, the year's gain is reduced by the blended rate. Years with losses are left untouched (no tax on losses).
A few caveats worth knowing:
- This is an estimate, not tax advice. Real-world results depend on your full tax picture, loss harvesting, and timing.
- Strategies with less than 12 months of history can't yet establish an LT Gains % and are left untaxed.
- The model does not include fund yields or distributions, which can add to the actual tax bill.
- Like the other toggles, it's global across all views and preserved in the page URL.
Use the ⚙ button next to the toggle to revisit your settings at any time.