By Shirley Pulawski

Tax time may not be right around the corner, but the last quarter of the year is here, so it’s time to get in gear to maximize the potential for tax deductions as the year draws to a close.

If you plan your finances carefully and take a look ahead at your income and the tax code for the 2013 year, you could position yourself for some savings come April 15. None of these tips are any substitute for a conversation with a reputable tax lawyer, but it may help make the most of your income and reduce what you owe.

Plan your charitable donations now

If charitable giving is part of your tax plan, don’t wait until the busy month of December to start making end-of-year contributions or at least making decisions about amounts to allocate and to whom. Put together a list now of reputable charities to which you would like to donate, and budget appropriately.

Increase retirement account contributions

Another way to lower your taxable income is to pay more into your retirement plan if you’re not already maxed out. Ratchet up your 401(k) or IRA contributions to save on taxes owed and boost your retirement security at the same time. Most people under 50 years of age can contribute up to $17,500 (or $5,500 more over age 50) annually, so crunch the numbers and see if this is right for you.

Spend down flexible spending accounts

If you’re in a pre-tax flexible spending program through your employer, check your balance and spend the amount down between now and the end of the year, if possible. Some eligible expenses may include eyewear, medical devices, and even co-payments and deductibles.

Sell off losing stocks

If you have stocks that are worth less than what you paid for them, and you don’t want to hang onto them, you can sell them and take a capital loss on your tax return. While selling the stocks in order to be able to declare the loss on your tax return might only make up for a small percentage of the loss, you can claim up to $3,000 annually. Naturally, there is additional paperwork involved, but if you’ve been looking for a reason to let go of some losers, now could be a good time. '

Go green

There is still time left to upgrade to energy-efficient appliances and reap up to a $500 tax credit. This credit was set to expire in 2011, but was extended through the end of this year. If you haven’t taken the credit before, some items which may be eligible include water heaters, furnaces, heat pumps, central air conditioners, boilers, and even building Insulation, windows, and a new roof. In a qualifying furnace, circulating fans installed may also count, as well as other renewable or alternative technologies such as biomass burners of stoves that use qualified biomass fuel.

Other credits have been extended as well. Purchases of plug-in electric drive vehicles, combined heat and power systems, onsite renewable energy systems including ground-source heat pumps, and fuel cells and microturbines are scheduled to be extended until Dec. 31, 2016.

Have a plan and know the rules

This is not a comprehensive list of tax deductions or credits, so spend some time at to learn more about qualifying expenses and eligible purchases, contributions, and gifts. Do a quick run-through of your income and expected deductions to determine what you'll owe, and if there are sound ways to act now and reduce your tax burden.

In general, there is some good news about changes to the tax bracket structure this year. The standard deduction will increase slightly with inflation, and tax brackets have changed. Wolters-Kluwer, CCH announced last month that the changes are expected to result in an increase in savings for many. The firm said couples filing jointly with an income of around $100,000 could expect to pay around $145 less in taxes, while a anyone making around $50,000 and filing as single could expect a savings of about $72.

Related Articles
  1. Taxes

    Before You Visit Your Tax Preparer: Do This

    The earlier you start preparing your tax records and documents, the more likely you are to have a smooth tax return experience – and all the tax benefits you're due.
  2. Retirement

    Tax Tips For The Individual Investor

    We give you seven guidelines to help you keep more of your money in your pocket.
  3. Personal Finance

    3 Financial Tasks We Think Are Harder Than They Really Are

    Use these three tips to help put your financial situation into perspective. It turns out, organizing your finances isn't nearly as hard as you thought.
  4. Taxes

    Should You File An Early Tax Return?

    When it comes to filing your taxes, it can often pay to wait until the deadline.
  5. Taxes

    7 Year-End Tax Planning Strategies

    Do you have a capital loss that could be booked and used to offset future tax liabilities? If so, it may be time to sell.
  6. Taxes

    Why You Should Itemize Your Tax Deductions

    This strategy of moving your tax deductable payments and donations to the following year could mean hundreds more on your return.
  7. Taxes

    10 Most Overlooked Tax Deductions

    The receipts you cram into your wallet could be replaced with cash come tax season.
  8. Taxes

    How & Where to File Form 1040 (And Which Version)

    All taxpayers need to know three things when filing a 1040: which form to use, how to file and where to file. After reading this, you'll know all three.
  9. Savings

    Should You Look at 529 Plans Outside Your State?

    529 savings plans are not restricted by geography. So if your in-state offering has high fees or poor investment choices, look elsewhere.
  10. Taxes

    The Purpose Of The W-9 Form

    The W-9 form provides key data your clients need if you're an independent contractor. Just be sure you're not really an employee who should fill out a W-4.
  1. Are catch-up contributions included in the 415 limit?

    Unlike regular employee deferrals, catch-up contributions are not included in the 415 limit. While there is an annual limit ... Read Full Answer >>
  2. Can catch-up contributions be matched?

    Depending on the terms of your plan, catch-up contributions you make to 401(k)s or other qualified retirement savings plans ... Read Full Answer >>
  3. Are catch-up contributions included in actual deferral percentage (ADP) testing?

    Though the Internal Revenue Service (IRS) carefully scrutinizes the contributions of highly compensated employees (HCEs) ... Read Full Answer >>
  4. Are personal loans tax deductible?

    Interest paid on personal loans is not tax deductible. If you take out a loan to buy a car for personal use or to cover other ... Read Full Answer >>
  5. Can a 401(k) be used for a house down payment?

    A 401(k) retirement plan can be tapped to raise a down payment for a house. You can either borrow money or make a withdrawal ... Read Full Answer >>
  6. How old do I have to be to make catch-up contributions?

    Most retirement plans such as 401(k), 403(b), individual retirement accounts (IRAs) and Roth IRAs allow for catch-up contributions ... Read Full Answer >>

You May Also Like

Trading Center