Individuals must get their tax affairs in order by January 1.
There are three main areas to focus on:
First, payments. Take a look at your January bills. Any that are deductible can be paid in December, and therefore, count for 2005 write-offs. Bills to consider paying early are state income tax, property tax, tuition, childcare, or your January mortgage payment.
Second, your investments. Contribute as much as you can to your 401k or other retirement account before the year is done. That’s all pre-tax income. Also, if you have stocks or mutual funds with losses, if you sell them now, you can deduct the losses.
Thirdly, charitable donations. Make them now, if you can afford it.