Tax drag is the portion of an investment portfolio's return lost to taxes each year — from fund distributions, dividends, interest, and realized gains — rather than the return an investor actually keeps.

How accurate is this quick check?

It's a directional estimate based on four simplified inputs, not a full tax analysis. It's meant to show whether tax drag is likely a meaningful issue for your portfolio, not to replace a review of your actual tax returns and account statements.

Why does fund turnover matter for taxes?

When a fund sells positions to rebalance or replace holdings, it realizes capital gains and distributes them to shareholders — creating a taxable event even for investors who never sold a share themselves. Higher-turnover, actively managed funds generally produce more of these distributions than low-turnover index funds.

Tax Drag Quick Check | 90-Second Portfolio Estimate

Step 1 of 4

How much do you have invested in taxable brokerage accounts?

$1,000,000

$100K$10M+

Taxable accounts only — not IRAs, 401(k)s, or Roth accounts, which don't generate annual tax drag.

Step 2 of 4

What's it mostly invested in?

Individual stocks or low-cost index ETFs

Buy-and-hold, minimal trading

A mix of index and actively managed funds

Some rebalancing, some manager turnover

Mostly actively managed mutual funds

Frequent trading inside the funds

Step 3 of 4

What's your combined federal + state tax rate on investment income?

Under 24%

24% – 32%

32% – 37%

37%+ (including the 3.8% NIIT surtax)

Not sure? Pick your best guess — this only shifts the estimate, not the shape of the answer.

Step 4 of 4

Over how many years do you want to see the impact?

15 years

5 yrs30 yrs

Your Estimate

Calculating…

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Estimated Annual Drag

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Lost Over 15 Years

This is a directional estimate based on four inputs — not a full analysis. A real answer requires your actual tax returns, account statements, and cost basis history. That's the work we do.

Prefer to control every input yourself? Try the full Tax Drag Estimator.

The Tax DragQuick Check.

The Tax Drag
Quick Check.