Tax-saving Strategies for the Rest of 2011

The 2011 income-tax filing season is drawing near, but you still have time to make late-year planning moves that could reduce your personal and business tax liabilities. Here are some ideas.

Winterize your home. Add insulation or replace your old furnace with an energy-efficient model. These and other improvements can qualify for an energy-related tax credit of up to $500 (no more than $200 for windows). The credit is reduced by amounts previously claimed (post-2005), and other percentage and dollar limits apply.

Use capital losses. If you realized taxable capital gains on investment transactions earlier this year, consider taking losses on underperforming investments to offset the gains. Capital losses are deductible against the year's capital gains and up to $3,000 of ordinary income ($1,500 if married filing separately). You can carry forward any capital losses you don't use for 2011 to future tax years.

Donate. Contributions to qualified charitable organizations are deductible as an itemized deduction. Keep receipts and your canceled checks, credit card statements, or other bank records for substantiation purposes.

Purchase business assets. Consider purchasing equipment or other fixed assets your company needs if the purchase will be eligible for 100% bonus depreciation or the Section 179 expensing deduction. We can give you details about these deductions and what can qualify.

Accelerate other expenses. Buy office supplies or have repair work done before year-end if you're looking to pump up deductible business expenses. If your company is involved in research and development activities that can qualify for the research credit, be aware that the credit applies only to amounts paid or accrued before January 1, 2012. Although lawmakers have extended the research credit in the past, there's always a chance further extensions won't be available.