The concept of tax-loss harvesting sounds sophisticated but it's actually straightforward once you understand what it does.

When a holding in your taxable brokerage account has declined in value, you can sell it, realize the loss for tax purposes, and immediately buy a similar (but not identical) fund. The loss offsets capital gains or up to $3,000 of ordinary income per year, reducing your tax bill. Any losses above $3,000 carry forward to future years.

The wash-sale rule is the one wrinkle: you can't sell a fund at a loss and buy the same or 'substantially identical' fund within 30 days before or after the sale. The workaround: sell VTI at a loss and immediately buy SCHB (total US market, different fund, similar exposure). Same strategy, different ticker.

Tax-loss harvesting is most valuable in high-income years with large capital gains to offset. For most people with modest taxable accounts, it's worth knowing about but not worth obsessing over.