Below are tips on reducing your income taxes --
Send in next January's mortgage payment early -- If you make the mortgage payment in the current tax year, you can deduct the interest this year.
Make an extra payment or two on your student loan -- Doing this allows you to take the deduction on your taxes this year.
Pay your state taxes before December 31st -- You can deduct them in the current tax year.
Pay your doctor and dental bills -- You can use these payments to increase your medical expense deduction this year.
Sell loser stocks. Sell your worthless or near-worthless stock before the end of the year so that you can use the loses to offset any capital gains you might have made this year. If your loses exceed your earnings, you can deduct up to $3,000 of your losses from your ordinary taxable income.
Close your Roth IRA. If your Roth IRA turned out to be a real loser, you can close the account and take the loss as a miscellaneous deduction.
Don't buy mutual funds in November or December. Mutual funds make dividend and capital gain distributions most often during the last eight weeks of the year. If you buy a mutual fund at this time, you will have to pay taxes for a fund you owned for just a few weeks.
