As the year draws to a close, there are several tax-saving ideas you should consider. Use this checklist to make sure you don't miss an opportunity before the year is out.
- Retirement distributions and contributions. Make final contributions to your qualified retirement plan, and take any required minimum distributions from your retirement accounts. The penalty for not taking minimum distributions can be high.
- Investment management. Rebalance your investment portfolio, and take any final investment gains and losses. Capital losses can be used to net against your capital gains. You can also take up to $3,000 of capital losses in excess of capital gains each year and use it to lower your ordinary income.
- Last-minute charitable giving. Make a late-year charitable donation. Even better, make the donation with appreciated stock you've owned more than a year. You can often can make a larger donation ñ and get a larger deduction ñ without paying capital gains taxes.