| 1. Review investment portfolios for potential tax | | | | charity, consider giving the gift of stock instead of |
| consequences. Did you own Apple or some other | | | | cash. Stocks with large capital gains would be an |
| high performing stock this year? Then you might | | | | excellent choice. Instead of selling them, you could |
| want to take a look at the taxable gains in your | | | | donate them and avoid paying tax on the |
| portfolio. By selling the underperformers, you can | | | | appreciation. |
| reduce your tax liability from selling some of those | | | | 5. Add more to your 401k. To lower your tax bill, you |
| high performers. You can even have a net capital | | | | may want to boost your 401(k) contributions, but it |
| gains loss of up to $3,000 (consult your tax | | | | is important to make sure you don't go over the limit. |
| professional). | | | | 6. Pay off those deductible expenses before year's |
| 2. Watch out for taxes on mutual funds. A common | | | | end. If you pay off your state taxes or property |
| mistake investors make is to buy a mutual fund in | | | | taxes early, that accelerates your federal deductions. |
| December. By law, mutual funds must pass any | | | | You can make an extra mortgage payment (the |
| capital gains along to investors before the end of the | | | | interest is deductible), or go for that dental work or |
| year. By buying a fund at the wrong time, you could | | | | surgery before year's end. |
| owe taxes on the fund as if you had held it all year | | | | 7. Lastly, take this time to get organize. Put together |
| long. | | | | a financial binder with your important documents. Also |
| 3. Required Minimum Distribution. If you turned 70 | | | | include the locations of important documents(such as |
| ½ before 2007, you must take a minimum | | | | a will, safety deposit box location, bank accounts, |
| distribution from your IRA account by December | | | | etc.) This will make it easier for loved ones to track |
| 31st. Your advisor can help you calculate the amount | | | | down documents in case anything should happen to |
| to be withdrawn. | | | | you. |
| 4. Giving a gift to a charity. If you have a favorite | | | | |