Make Your End-of-Year Financial Checklist

Go green at home: There are a number of environmentally friendly upgrades that you can make to your home, including installing energy efficient windows, doors, roofing, insulation, water heaters and more, that need to be made by Dec. 31 to qualify for a tax credit. If you need to do some home improvements, incorporating some of these energy efficient systems into you home before the end of the year will help reduce your taxes and, even better, lower your energy bills in the future.

Go green driving: There are tax credits worth $250 to $3,000 still available for purchasing certain hybrid cars if you are in the market for one. This tax credit phases out for the fuel-efficient vehicles once a carmaker sells 60,000 hybrids. Toyota was the first carmaker to hit this mark and the tax credits for Toyota and Lexus hybrids are no longer available. Honda reached 60,000 cars this fall. While you can get the full tax credit if you purchase a qualifying Honda hybrid before Jan. 1, the credit will be cut in half for purchases made in the new year. You can see all the hybrid cars that still qualify for this tax credit at the IRS Web site.

Year-end bonus: If you will receive a bonus this year, take the time to estimate whether it will be better to receive that money this year or next year for tax purposes. If you anticipate that your tax rate will stay the same, see if it is possible for your employer to delay payment until after Dec. 31. While you will still have to pay taxes on this income, by receiving it in January you delay these taxes for a year, which allows the money that would have gone to the IRS in April 2008 to earn interest for a year.

Underperforming stocks: Take a look at your stock portfolio and determine if there are any losing stocks that need to be tossed because you believe they are not going to rebound. If there are, you can use these losses to offset taxable gains from other investments. If you had some really bad losing stocks, you can also use up to $3,000 of these losses to reduce your taxable ordinary income for 2007. If you have a loss in excess of that amount, you can carry it over to future tax years.

Make 529 plan contributions: If you have set up 529 college saving plans for your children, contributions need to be made by Dec. 31 to qualify toward this year. This can be important, since 529 contributions are subject to the annual gift tax exclusion of $12,000 per individual for 2007.

Give away money: You are allowed to give away up to $12,000 each year to any individual without having to pay a gift tax. If you believe that someday you might be subject to the estate tax, giving away the money tax free can be a much better way to distribute it. But you are limited in the amount that you can give away each year, so if you don't do it before Jan. 1, you can't carry it over and give away more next year.

While the end of the year is always a busy time, it's worthwhile to take some time to evaluate ways to put some extra money in your pockets come 2008.