You may be entitled to some major refunds on your 2011 tax return, but only if you take action before the end of 2010.
While there are countless loopholes and write-offs to consider come tax time, these two require you file the necessary paperwork before January 1st rolls around:
- Charitable donations: They say philanthropy is the gateway to power, but it may also hold the key to a substantial write-off. Donating money or goods (e.g., a used car, land, equipment or other resources) can help taxpayers itemize their deductions. Charitable deductions are common on tax returns and – depending on just how charitable your deduction – they can provide returns in the hundreds or thousands of dollars. To wit: Donating a used car – even one in need of major repair – could provide a deduction somewhere in the neighborhood of the car’s blue book value.
- Cashing in on losing investments: It’s never easy to admit defeat, but if you own stocks or investments that are losing money (and show no signs of stopping), now may be the best time to cut your losses and cash in your chips. Doing so frees you up to invest your money more wisely, and it also makes you eligible for a maximum reduction of $3,000 on your reported income (lower reported income often translates to a larger return).
Can you think of any other tax write-offs or deductions that require people act now? Feel free to share your thoughts in the comments section below.
Source: “Top 6 Ways to Increase Your Tax Refund Now,” by Mark Cussen, YahooFinance, 10/20/10.