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As the new year nears, some last tax-saving tips

Now that the holiday season is winding down, here are some last-minute things you can do before the tax season begins:

1. Manage capital gains. With this year's erratic stock market performance, you may have some winners already in hand. Now it's time to count the losers. It's usually better to offset a gain with a loss. You'll pay taxes on the gains this year, while being limited to a maximum $3,000 in net losses next year and beyond. So you should consider selling some losers now to avoid unnecessary taxes, especially if you plan no offsetting gains in the next few years. Use your broker and mutual fund Web sites to figure where you stand, then make the appropriate sales. Be aware of the so-called "wash sale" rule, which negates losses if "substantially the same" security is repurchased within 30 days.

2. Alternative minimum tax. This one is, at the time of this writing, almost too complicated and vague to discuss. Congress finally put through another temporary patch at the last minute, returning the exemption to $62,550, the same figure as last year for those married filing jointly. The trick is to figure whether you might "qualify" for AMT this year or next, and push deductions away from the year it might hit, else you effectively lose them. And, avoid net capital gains if your AMT-adjusted income might approach an "exemption phase-out" limit — $150,000 married filing jointly. Of course, these strategies are hard to figure — if you're in this "zone" you might chat with a tax pro.

3. Charitable contributions. Contributions have always figured into year-end tax planning. This year is no different, but I again suggest donor-advised funds as a mechanism. You fund your own fund— a personal foundation of sorts — and can deduct the entire donation for this year (subject to percentage-of-income limits.) But the funds don't have to actually be given to anybody — you can decide that later as deserved. Major brokers and others manage donor-advised funds for individuals. Also, remember to get those cash receipts. Starting this year the rules require solid documentation. Those collection plate donations won't work unless you have some record — so create one or have your recipient do so. And if you're taking a required minimum distribution from a retirement plan, don't forget — this year only you can move RMDs, up to $100,000, directly to a charitable organization, bypassing your gross income. That can help especially if gross income is high enough to trigger taxes on Social Security.

4. Small-business possibilities. First and easiest, you can time your income and expenses. Ask your customers or clients to defer payment to next year. And, buy what you need before year-end, especially if there's room under the $114,000 Section 179 cap. Defer $4,000 in income and record $4,000 in expenses — the $8,000 swing might save $1,200 in self-employment taxes alone. And, for you families, don't forget to put those kids to work, especially during holiday vacations. You can pay them up to $5,350 per year for legitimate work without incurring taxes, more if you set up an IRA in their name. Design a Web site, create a brochure, pass out flyers, you name it. It's a deduction for your business, and your kids end up with the cash and something to do.

5. Health savings accounts. If you're eligible, or already have an HSA, consider the new maximum limits of $5,650 per year for a family regardless of your deductible (used to be limited to your deductible). First-time users only need apply for the high-deductible health plan this year — you don't have to start it nor fund the HSA until next April 15.

6. Extend your education. Sign up for a qualifying college or vocational course, and you can use the Lifetime Learning Credit and/or deduct some of the tuition if you qualify.