If losses exceed gains, you might want to create some taxable gains before year-end. If you've decided to sell a mutual fund, consider doing so before dividend and capital gain distributions are made at the end of the year. Conversely, buying mutual funds at year-end may cause you to pay tax on distributions you don't generally benefit from. Remember that you must pay tax on dividends even if you reinvest them in additional shares of stock. Consider shifting income to children over 14 to take advantage of their lower tax bracket.
Gifts can save both income and estate taxes.
Take advantage of this year's tax-free gifting allowance by completing your gifts before December 31. Consider donating certain appreciated stock to your favorite charity. You won't be taxed on the appreciation and will generally be able to deduct the fair market value of the stock as a charitable contribution. There's been a great deal of publicity about the marriage penalty. When people marry, they can end up paying more tax than they did as singles.