Tax season doesn’t officially kick off till after you’ve gotten over your NYE hangover, but if you want a shot at reducing your taxes before April 15, you’ve got to start making moves now.
Not everyone can afford to hire their own personal CPA, so to give you a head start, we tapped financial experts from around the country for their best advice on the simplest ways to maximise your tax return before Dec. 31.
Here’s what they had to say:
Go green before it’s too late. The $500 tax break President Obama offered homeowners who make environmentally-friendly improvements to their home is set to expire Dec. 31. So if you’ve been thinking about with getting a new hydro-efficient washer/dryer or installing energy-saving light bulbs, looks like your Christmas list just got a bit longer.
Max out your your 401(k). Any contributions you put in a 401(k) plan are made pre-tax, so they’ll lower your taxable income, says Scott Holsopple of Smart401k. You should also think about throwing your year-end bonus (you lucky dog, you) into your 401(k) as well. It’ll put you that much closer to hitting your retirement goal.
Count your investment losses. If your investments took a beating this year, keep track of exactly how much you lost so you can write it off on your taxes–up to $3,000. “Selling investments that have done poorly can reduce your tax bill on those you’ve made money on if you’ve realised the gains,” says Adam Koos of Libertas Wealth. Just keep in mind you’ll have to wait 31 days if you want to re-purchase them, says financial advisor Marcia Riner.
While you’re at it, pay off your property taxes. Along with your mortgage, you can write property and real estate taxes off on your 2011 taxes, says Chris Zeches of Zeches Financial Services.
Donate to charity. This one’s a no-brainer. Any charitable givings you donate before Dec. 31 can be written off your 2011 taxes. Zeches recommends making donations by credit card so you’ll have documentation handy and can easily track your transaction. Thinking about donating airline miles? Here’s how.
Give your college student a leg up. In about 30 or so states, contributing up to $2,000 to a 529 college savings plan could reduce your state taxes, Koos says.
Now that you’re ready for tax season, see 9 ways to get your finances back on track >
Business Insider Emails & Alerts
Site highlights each day to your inbox.