See the article. Below are the suggested moves and my comments (see the article for the reasoning behind each move or click on the link for a separate Kiplinger’s story on each move).
1. Beware the AMT
2. Offset Taxable Gains
3. Avoid Mutual Fund Dividends
4. Donate Your IRA Distribution
5. Boost State Sales Tax Deductions
6. Close on Your Mortgage in 2007
7. Who Pays the Gift Tax?
8. Fund a Kid’s Roth IRA
9. Score an Energy-Saving Tax Credit
10. Last Chance Tax Break
11. Max Out Your Retirement Savings
12. Wait for 0% Capital Gains Tax
13. Trim taxes with Flex Accounts
14. Get a Receipt for Holiday Giving
15. Give More and Pay Less With Securities
1. Good point. If you have too many deductions you can get hit with the AMT and you will lose all or most of the deductions.
2. It is not too late to tax-loss harvest.
3. I’ll do them one better: avoid mutual funds. Only invest in low-cost broad-based index funds or ETFs. They are more tax-efficient and have better before-tax returns too.
4. There are lots of different ways to give certain moneys or items to charity that will reduce your tax bill more than by just giving taxable cash.
5. This would be a hassle to account for. Generally not worth it unless you live in a state without the income tax or unless you bought a few high-priced items (e.g., cars).
6. This is not something most people can really time.
7. Talk to an estate attorney to set up a plan so that you do not have to pay gift taxes.
8. Excellent idea. Even better, make the kid put some of their earned money into it.
9. Not worth it for the money alone.
10. Not familiar with that one.
11. I like to do this at the beginning of the year to maximize tax-free growth. Also, if you can, do a Roth instead of a normal IRA or 401(k). It only makes sense to wait if your income may be too high to do a Roth or normal deductible IRA.
12. Only works if you won’t make much money.
13. Sure. They can be a hassle, though.
14. I think it is best to give in large amounts and to only a few organizations. Then they will automatically send a receipt. Plus, it is easier for everyone involved.
15. Excellent idea.
Disclosure: I am not a tax, legal, or accounting professional. This is not to be construed as legal or tax advice and represents only my opinion.