Tax Guy: 6 things to do throughout the year to reduce the taxes you owe

The new postcard-sized Form 1040.

We know it doesn’t sound like fun. But trust us. A little advance planning will almost always help you reduce the taxes you owe. Here are some maneuvers that are especially useful come year’s end.

Manipulate your income

The most basic form of year-end planning involves pushing tax bills into the future by deferring income into the next year and accelerating deductions into the current year. One example would be to postpone an IRA withdrawal, another would be to prepay your Jan. 1 home mortgage interest in December. Unfortunately, it isn’t quite that simple these days.

You must be aware of the “side effects” of any action that changes your adjusted gross income from one year to the next.

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