13 smart year-end tax moves
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For tax purposes, most charities will provide you with a receipt to help support your itemized claim. It's up to you, though, to determine the value of the items you donate. Generally, the Internal Revenue Service accepts a fair market valuation; that is, what a willing buyer would pay for the article. Bankrate has some work sheets to help you figure the appropriate amount.

Part of the reasoning behind the new requirement on donated goods was the possibility that some taxpayers were overvaluing such items for tax purposes. Similar questionable deduction claims also prompted the tougher vehicle-donation rules that took effect in 2005. While you now might not get as much as you hoped for an auto donation, you'll still get some tax benefit from giving away your car. There's still plenty of time to drop off your old vehicle or make arrangements for your chosen charity to pick it up or tow it away.

Miles traveled to do charitable work also provide tax benefits. You can deduct them at 14 cents each. A holdover from changes made in the wake of Hurricane Katrina will give you an even better tax break. If you used your vehicle for qualified charity work in connection with storm-relief efforts, you can deduct such traveling expenses, through Dec. 31, at 32 cents per mile.

If you're an investor, consider donating stock that has appreciated in value but no longer fits your investment plan. "This has been a good year for the stock market, and if people have appreciated stock this could be an ideal asset with which to make a charitable gift," says Levitan. "The charity gets full dollar value and, for the donor, no gain is recognized. Plus you get the deduction for the gift."

Just make sure the donated stock is one you've owned for more than a year and that it has gained value while you owned it. It doesn't do you any good to give away a stock that's lost value, since you can't deduct that loss.

2. Evaluate your portfolio
A stock loss under different circumstances might be beneficial.

Since the stock market has been on a roll, especially during the last quarter of 2006, many investors have recently cashed in on those gains. Others are using the last month of the year to rebalance portfolios. Remember, though, that your investment savvy will cost you in capital gains taxes.

You can lessen any looming investment tax bill by clearing the financial losers from your portfolio by Dec. 31, and taking a loss on the sale.

While it's never easy to take a loss on an investment, it pays off from a tax standpoint because Uncle Sam lets you net losses against gains. You might be able to totally eliminate any tax consequences from your gains. If you have more losses than gains, you can use up to $3,000 of the excess to reduce taxable ordinary income. If your bad stocks cost you even more, you can carry the excess into future tax years.