taxes

10 year-end tax moves to make

Medical and dental expenses, for example, cannot be deducted unless they exceed 10 percent of AGI. Miscellaneous expenses, which include business expense claims, must be more than 2 percent of AGI.

To get over these deduction hurdles, start consolidating eligible expenses now. This strategy, known as bunching deductions, will push them into one tax year where you can make maximum tax use of them. The sooner you start this process, the better. It's much easier to plan your costs now than scramble to come up with eligible expenditures as December days fade.

7. Add to or open an IRA

Remember that added money you put in your 401(k) to lower your taxable income? Bulk up your retirement planning even more by contributing to an individual retirement account.

If you have an IRA account or open a traditional IRA, you might be able to deduct at least some of your contributions on your tax return. If you don't make a lot of money, your contribution also could be used to claim the retirement savings contributions credit.

Even if you won't get a deduction, you'll be adding to your nest egg so that you can retire on your terms. And while it's true you can wait until the April 15 filing deadline to contribute for the previous tax year, the sooner you put money into an IRA, traditional or Roth, the sooner it can start earning more for your golden years.

Self-employed workers also get an added retirement saving benefit. There are a variety of plans -- SEP-IRAs, Keoghs, solo 401(k) plans -- into which you can put some of your self-employment earnings. If you're a sole proprietor, your contribution to a self-employed retirement plan also is deductible on your tax return.

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.

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WEEKLY TAX TIP NEWSLETTER

Our tax expert Kay Bell provides resourceful tips and advice to help you stay prepared for filing.

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