7. Go shopping
A popular itemized expense is for other taxes you've paid. Most people deduct state and local income taxes on Schedule A. But if you live in a state with no income tax or your income tax rate is low, it will be more advantageous to deduct your state and local sales tax amounts.
The IRS provides tables with the average amount of state sales taxes paid in each state. A worksheet (or program in your computer tax software) also helps you figure any local sales taxes to add to the table amount.
You also can add to the average sales tax amounts any levy on the purchase or lease of a vehicle. This isn't limited to cars; you also can count sales tax on trucks, motorcycles or motor homes, as well as boats and airplanes. Keep your sales receipts, too, for a mobile or prefabricated home purchase or for material used to substantially renovate your residence. Sales taxes on these purchases also are deductible as additions to your state's average sales tax table amount.
8. Be generous to charities
As you're putting together your holiday shopping list, be sure to include charitable gifts that could help reduce your tax bill. In addition to the usual dollar donations or household goods and clothing, consider some less traditional ways to give to charities.
Many groups will accept vehicles , with some even making arrangements to pick up the jalopies.
Donate stock or mutual funds that you've held for more than a year but that no longer fit your investment goals. The charity gets the asset to hold or sell, and your portfolio rebalancing nets you a deduction for the asset's value at the time of gifting. Even better, you don't have to worry about capital gains taxes on the appreciation of your gift.