Year-end tax tips: Things you need to do now!

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By Catherine Holland By Catherine Holland

PHOENIX -- Tax time is still several months off, but there are several things you can -- and should -- do right now to improve your situation come time to file.

Some strategic financial moves made now can save you quite a bit of money in the long run.

1. Make the tax credit contributions by year end - private school, public school, working poor, and military relief services are both tax deductions and credits. You get a two-for-one benefit.

2. Prepay your license tags, real estate, medical expenses, school tuition, or additional house payment to get bigger deductions (bunching deductions).

3. Defer income, if possible, until next year.

4. Take capital gains this year rather than next year. Current rates are 0-15 percent, while next year they will be 20-39.5 percent.

5. Different income brackets take different strategies to reduce, defer or eliminate taxes.

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