The upside to a TLH service like ours is that you can lower your tax bill today, by using harvested tax losses to offset any capital gains. This lowers your tax bill by deferring the tax bill into the future.
The potential downside occurs because the TLH service defers taxes into the future while lowering the cost basis of your positions in the present. When you finally liquidate your portfolio, you may face a higher tax bill than a traditional buy-and-hold strategy. A sound tax strategy—for which you should consult a tax professional—can mitigate this impact through thoughtful estate and gift planning. (For example, if you bequeath these assets to your heirs, they receive stepped-up cost basis and the taxes can be deferred permanently.)
Another potential downside is that the trading to harvest these losses may incur commissions on your account. SigFig does not receive any of these commissions—they are the trading fees charged and received by custodians.