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Why is tax loss harvesting helpful for passive investing?
The harvested losses are capital losses.  See this IRS page: Generally, realized capital losses are first offset against realized capital gains.  Any excess losses can be deducted against ordinary income up to $3,000 ($1,500 if married filing separately) on line 13 of Form 1040.  Losses in excess of this limit can be carried forward to later years to reduce capital gains or ordinary income until the balance of these losses is used up. This means that your harvested losses can be used to offset ordinary income --- up to $3000 in a single year, and with extra losses carried forward to future years.  It is pretty close to a free lunch, provided that you have some losses somewhere in your portfolio. This free lunch is available to anyone, but for a human, it can be quite a chore to decide when to sell what, keep track of the losses, and avoid the wash sale rules.  The advantage of robo-advisors is that they eat that kind of bookkeeping for breakfast, so they can take advantage of tax loss harvesting opportunities that would be too cumbersome for a human to bother with.