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Last-minute tax-saving
moves to make now

December 26, 2006

Are you back from your gift exchange excursion? Got rid of that horrible sweater from dear old Aunt Trudy? Good. Now you can work on your taxes!

Calendar_dec20062_2
Honestly, now is the time to be thinking about your 2006 tax bill and how you can lower it.

Let’s face it. After Jan. 1, when it comes to our current tax bills, the only tax-saving option for most of us is contributing to a tax-deductible traditional IRA, if we’re eligible.

But in these waning days of 2006, tax savings still abound!

You already know the easy ones: Give to your favorite charity (I’ve blogged on some options here, here and here), sell some losing stocks to offset any capital gains you had this year, prepay some tax-deductible expenses to maximize your 2006 tax breaks.

Those are just a few, and they’re included in this baker’s dozen tax moves to make by Dec. 31:

1.     Get in the giving mood
2.     Evaluate your portfolio
3.     Let your home help you out
4.     Embrace energy efficiency
5.     Go for better gas mileage
6.     Flex your spending account muscle
7.     Maximize medical deductions
8.     Make early miscellaneous payments
9.     Shift incoming income
10.   Tend to your retirement
11.   Examine education payment options
12.   Check your withholding
13.   Explore extended tax breaks

Details on these 13 year-end tax-saving moves can be found in this story I wrote for Bankrate.com. Hmmm. Looking at this list now, I wish I’d thought about a fun way to arrange and/or rename them for acronym purposes. Note to self: Next year!

William Perez at About: Tax Planning also has 12 year-end tax suggestions. Check it out, along with my story, then compare, contrast, discuss.

And Gina at Gina’s Tax Articles has some good year-end advice on keeping the alternative minimum tax at bay.

OK. Ready for an early ’06 tax run? Let’s do it! Sit down and decide which of these tax moves fit into your tax situation and make them now.

That way, you won’t drop the 2006 tax ball before Dick Clark and his minion (why do I want to preface that word with "evil"?) Ryan Seacrest (and why do I always think of the movie All About Eve when I see those two guys referred to together?) drop the 2007 ball in Times Square.

December calendar courtesy Ecardia.com

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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