The number one piece of advice many experts give this time of year involves maximizing contributions to your 401(k) or IRA.
Raymond James Certified Financial Planner Dennis Briggs says it is the simplest and most effective option for offsetting your tax burden.
Next, accelerate any discretionary income, because taxes are going up next year. Lets say you are going to get a bonus and you know its coming in the first quarter of 2013. See if you can get it in 2012, as tax brackets are going to be higher in 2013.
Strategize your itemized deductions. It might help your 2012 bottom line to pay for deductible expenses such as medical costs now. If you are buying a new car, you may want to do it in 2012 versus 2013 because you can use the deduction of the sales tax in 2012.
If you are among the millions who itemize, give more to charity. This is a good time to clean out your garage or closet and donate those items because some of those deductions are going away next year.
And if you are retired, or you make less than $35,000 a year, experts recommend you take advantage of the zero capital gains rate. It may be your last chance.
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