Whether you are patting yourself on the back bragging about savvy investments, trying to rebounding from recent losses, or still struggling to get off the ground, you can save on your taxes if you make the right moves before the end of the year.

Be careful.Mostly because easy-to-follow advice that you read in newspapers, or hear on TV, can backfire.

Before you do anything, consider making income tax projections for this year and next.  Once you have the numbers  you can see how any actions you take will affect your tax bill each year. With that information in hand, these tips can help you hang onto some of it.

Defer Income
Most folks on salary don't have much choice on when they get paid. But if you are one of the lucky ones in line for a year-end bonus, consider asking your employer to give it to you in January. If you are self-employed you might want to delay billing to the new year. ote,it only makes sense to defer income if you think you will be a lower tax bracket next year.

Last- Minute Deductions
Contributing to charity is a noble way to get a deduction. You can make the process easier on yourself if you donate appreciated stock or property rather than cash from the proceeds of a sale. You may be able to give more to the charity, and you avoid paying capital gains.
Be sure to give yourself plenty of time because it can take several weeks to transfer stock or property.
Young taxpayers who may not have itemized deductions before should try bundling miscellaneous deductions such as tax preparation fees, job-hunting expenses, and professional dues to meet the IRS threshold of 2% of adjusted gross income.
Your miscellaneous deductions must add up to more than that, and you only get to deduct the amount above that level. Paying some of next year's expenses in December might give you enough expenses to put you over the line.
Accelerating major deductions such as state income taxes, property taxes, and mortgage interest may help, especially during a high-income year. But if your income is too high, look out -- there are phaseouts for itemized deductions.

Sell Loser Stocks
You may have a mix of winners and losers in your portfolio. If you have a big capital gain, consider selling some of the losers. You can erase your tax liability on the gain with a corresponding loss.
You can apply a max of $3,000 in net capital losses against ordinary income, reducing the amount of income on which you must pay taxes. Any additional losses in excess of $3,000 can be rolled over to subsequent years.

Contribute Maximum to Retirement Accounts
Tax-deferred retirement accounts are great investments. They can grow to a substantial sum because they compound over time free of taxes.
Company-sponsored 401(k) plans may be the best deal because employers often match contributions.
Bump up your 401(k) contribution so that you are putting in the maximum amount of money allowed ($11,000 for 2002).
If you think you can't afford it, run the numbers.  You may be surprised!
Also consider contributing to an IRA for yourself and spouse. Your $3,000 contribution is fully deductible if you did not participate in a company-sponsored retirement plan or if your income falls below $34,000 in 2002 for single filers and $54,000 for married couples.
If you are age 50 or over on 12/31/02 it goes up to $3,500 - its an opportunity to "catch up" your contributions.
Self-employed people should set up Keogh plans by December 31. Once the plan is in place, you can contribute up to $40,000+ until the tax filing deadline for your return.
 

On more than one occasion, I’ve received an e-mail asking for advice on how to keep from slipping up into the next tax bracket. The motivation behind such e-mails is typically a misconception of how our progressive tax system works. What many people don’t realize is that our federal income tax brackets reflect marginal rates, not a rate that is applied to your entire income. Here’s a quick example based on current income tax rates…

For a married couple filing jointly in 2008, the 10% tax bracket covers income from $0 to $16,050. From $16,050 to $65,100 the tax rate is 15%. And from $65,100 to $131,450 the tax rate is 25%. A couple with a taxable income of $100k will be in the 25% tax bracket, but they won’t have to pay 25% in federal income taxes on the full amount. Rather, they’ll pay just 10% on the first $16,050, 15% on the next $49,050, and 25% on the last $34,900. This works out to $17,687.50, or an effective rate of just under 18%.

Of course, you should still try to minimize your taxable income as much as possible by contributing to retirement accounts, taking advantage of perks like a flexible spending account (FSA), and maximizing your income tax deductions. But, as you can see from the numbers above, you have nothing to fear from earning a bit more money and finding yourself in a higher tax bracket. Moving to a higher tax bracket will never cause you to take home less money than if your income were lower.