Year-End Tax Savings Checklist

We've put together a checklist of tried-and-true ways to get your tax bill down. Just print it out and check each item off as you get through it. To read more about preparing for April now, read the main story.

If you get stuck along the way, send your questions to [e-mail].

TSC's Year-End Tax Checklist What to Do Benefit Run a projected 1999 tax return now -- especially if you exercised stock options or got a bonus. No surprises come April 15. And you can make an estimated payment on Jan. 15 if you owe more than you thought. Clean out your closet. Donate old clothes, furniture, appliances, etc. to charity. Get a receipt with the date and the value of your donation. Increased charitable contribution deduction, which lowers your tax bill. Also, deduct 14 cents a mile for driving in connection with charitable work, including the trips to bring the old clothes to the charity. Give appreciated stock to charity. You'll get a deduction for the fair market value of the stock, assuming you've held it for at least 12 months. Pre-pay real estate and state taxes. You get a credit for these taxes on your Schedule A. The bigger your credits, the lower your tax bill. (Note: This doesn't apply if you pay the alternative minimum tax.) Defer income. Push off year-end bonuses or compensation to January 2000. Decreases taxable income in 1999. Be sure to let your employer know early. Keep track of your investment expenses (Internet services, publications, payment for investment advice, etc.). They're considered miscellaneous deductions, deductible only when they exceed 2% of adjusted gross income. But they add up and can help to bring down your tax bill. Review your portfolio holdings. See our tax-loss selling story for more info. If you are subject to alternative minimum tax, don't prepay a thing. Push off deductions and pull in income. If you fall into AMT, you'll lose most of your deductions anyway. Give appreciated stock to kids, then sell. If the kids are over 14, they may be subject to lower capital-gains rates than parents. Consider putting proceeds in uniform gifts to minors' accounts. Max out your 401(k) or set up a Keogh if self-employed. Decreases taxable income. Set up a Roth IRA for the kids if they earned any money this year. Decreases their taxable income and starts their retirement savings. Wait until early next year to exercise incentive stock options. Exercising may bump you into AMT. Doing it early in the year will give you the proper time to plan. Give money away. Use up your $10,000 annual gift exclusion. There's no tax return benefit, but you lose the annual exclusion if you don't use it.