If you’re getting ready to send in your 2008 income tax return, double-check that you haven’t made these common errors:
* Overlooking reinvested dividends and reinvested capital gains. If you sold securities last year, be sure to increase your basis by the amounts you previously reinvested. If not, you’ll pay more than you owe, or you’ll report a smaller capital loss.
* Omitting carryforwards. If you were unable to deduct all your capital losses in a previous year, see if you can use them to offset capital gains from 2008, including mutual fund capital gains distribution. In addition, up to $3,000 worth of net capital losses (including unused losses from prior years) can be deducted against ordinary income.
* Forgetting past passive losses. Similarly, if you disposed of rental property last year, you may be able to deduct all the accumulated losses you weren’t able to deduct in prior years.
