As another year draws to a close, taxpayers everywhere need to take stock of their income, deductions and credits for the year and take the necessary steps to minimize their tax bills for 2014. Here is a list of things you can do before you ring in the New Year to reduce the amount you owe Uncle Sam and pump up your refund.

Before you start, do a rough estimate of what you expect your taxable income to be and whether you can itemize your deductions this year. Then, review the following list.

1. Get Deductions in Writing

If you have made any type of charitable contribution this year, get a written receipt from the receiving organization for your records (to deduct donations of more than $250, a  receipt is required by the IRS). The IRS now requires filers to break down their contributions on Schedule A and be able to furnish proof that their contributions – and deductions – are genuine.

If your noncash gifts, such as clothing or other tangible property exceed $500 in total value, you will now have to include Form 8323 with your return in order to claim the deduction. The amount that you can claim must equal the proceeds paid to the charity when your item or items are sold. The charity will furnish you with a Form 1098-C when this happens. However, if your donations are not sold before the end of the year, you will have to wait until they are before you can deduct them. For more, click here for IRS information on substantiating non-cash contributions.

2. Defer If You Can't Itemize

If it looks like you won’t be able to itemize your deductions this year, consider deferring substantial year-end charitable contributions until next year, when you may have a better chance of being able to write them off. This also goes for unreimbursed medical expenses and other types of deductible transactions or expenses over which you can control the timing. Remember that if you make a charitable gift in December with your credit card and then pay it off later, it will be deductible for the month/year in which it was purchased.

Conversely, if you can itemize this year, but it looks like you won’t be able to do so next year, consider paying expenses that you could deduct next year now, such as charitable contributions, estimated quarterly state tax payments, medical expenses and property taxes. This could beef up your refund for this year with no corresponding reduction the following year if you will not be able to itemize them anyway.

3. Time Your Gains and Losses

Work with your tax planner and investment advisor to determine when and how to sell any appreciated or depreciated securities so that you can minimize gains and maximize losses. To deduct losses, you must be able to write them off against gains. Generally, you must be able to write off losses from selling securities you held long-term (for more than a year) against gains you made from selling other long-term securities. Winners and losers you held short-term (one year or less) must be treated the same way. You will then compute your net long- or short-term gains and losses against each other to arrive at a final net short- or long-term gain or loss.

If you are simply selling losers to write off against winners for 2014, be sure to place all your trades by the last business day of December at the latest in order to have them count for this year. There's a $3,000 limit in how much you can write off in one year on stock losses; if you lost more, you may be able to deduct the balance on your 2015 taxes.

One strategy it's too late to employ: selling securities that lost money, then buying them back before year-end, in order to realize the loss. The IRS Wash Sale Rule requires sellers to wait for at least 31 days to buy back losing holdings. For more, see Capital Losses and Tax.

4. Choose Your Cost Basis Carefully

There are several different ways to compute your cost basis, but the method you choose from one year to another can sometimes make a big difference in your taxes.

For example, if you sell a lot of shares at a very large profit and must declare this income, you may have the option of choosing to use an identical number of shares that were purchased at a higher price as the basis if they have not been used already. (The rules for this can be complicated in some cases and may require professional assistance.)

If you don’t have any lots that you can use for basis at a decent price, consider simply donating some or all of your appreciated shares to charity. You can take a deduction for the full fair market value up to certain limits and escape capital gains taxes altogether as long as you have owned the securities for more than a year. This can be done in lieu of a cash donation, which may ease your Christmas budget. Calculating and reporting cost basis will be easier from now on, as financial firms have been required by law to supply this information for all of your buy and sell transaction each year.

5. Realize Income, If Necessary

If your income this year turned out to be substantially less than you had anticipated, then you may be wise to sell appreciated securities or convert a traditional IRA or retirement plan into a Roth account. This can allow you to use up tax credits, deductions and exemptions that you might otherwise miss out on.

For example, if you were laid off in February and couldn’t find another job until Thanksgiving, your combined exemptions, deductions and credit may well exceed your income for the year. You can use this opportunity to effectively reduce or eliminate your tax bill on your appreciated securities or Roth conversion by doing it now and crediting your deductions against it.

6. Make or Increase Retirement Plan Contributions

Keep cash handy to make or increase your IRA or employer-sponsored retirement plan contributions if your year-end income estimate shows that you might land in a higher tax bracket this year. You can make IRA contributions for 2014 until the filing deadline next April, but your 401(k) or 403(b) contributions must go in by December 31, 2014. If you're 50 or older, remember that you can make catch-up contributions to most plans that will increase your tax deduction.

7. Buy for Next Year, Deduct This Year

If you're a business owner or have professional expenses that you can deduct, make upcoming necessary purchases or expenditures by the end of 2014. This will allow you to write them off for 2014 instead of next year, and thus reduce your income. This can make an especially large difference if you are buying a major item for which the purchase price can be expensed in 2014.

As you may be aware, more than 50 tax breaks expired in 2013. On December 3, the House of Representatives approved a temporary extension through the end of this year so that individuals and business owners can continue to include them on their 2014 tax returns. At this writing, the Senate was considering the bill. Stay tuned and be sure to check the fate of the tax breaks that apply to you – and make whichever end-of-year accommodations could help you when you file your taxes. Meantime, check out 10 Tax Benefits For The Self-Employed.

The Bottom Line

Don’t be one of those unlucky tax filers who end up asking, when they file several weeks from now, “Why didn’t I do that in December?” Except for IRAs, now is your last chance to take action to reduce your tax bill for 2014, so don’t wait any longer. For more information on how you can reduce your taxes, consult your tax planner or financial advisor.

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