As the year wanes and most people s thoughts turn to holiday planning, it s worth taking just a few moments before the onslaught of baking, shopping and general merry-making to think ahead to rendering unto Caesar. The end of the year can provide a number of important tax-planning strategies, and the ones that will work for you depend on individual circumstances. Thus, you may want to try to defer income out of 2000 into 2001 or to accelerate deductible payments into the current year wherever possible. Most of the following tips are nothing more than specific applications of this general rule. First, if you itemize deductions, consider carefully which ones can be paid before year-end.
Charitable contributions are a good place to start.
Prepare a detailed list of what you contribute, get a receipt from the charity, and only claim the thrift store sales price as the amount of your deduction. It s not just your house that may benefit from a year-end cleaning, your portfolio may represent an overlooked source of tax savings through charitable giving. By donating securities you ve held at least a year, you become eligible to deduct their fair market value at the time of the contribution, without triggering capital gains. Your IRA can be funded right up until April 15th. If you are eligible to choose between contributing to a Roth IRA and a deductible IRA, you and your financial advisor have some serious number-crunching to do between now and then to determine which is more advantageous for you.