Savvy tax-planning tips for end of the year

As the end of the year approaches, it’s time to think about saving significant money by planning for April. That, of course, is when your tax return for 2014 will be due.

And what you do before the end of 2014 could make a huge difference in whether you end up having more money to spend in 2015 after filing your 2014 tax return. Consider some key credits and deductions to harness now.

• Job search or job move. If you were looking for a new job this year or are moving for a new one, realize that if you itemize on your tax return, you can use job-interview trips, résumé printing costs and moving expenses to reduce your taxes. Moving expenses apply only if you moved at least 50 miles to take a new job. And job-hunting travel expenses apply only if they meet cost thresholds and weren’t covered by the employer.

• Charity begins in your closet, garage or IRA. You can donate clothes, computers, cars, and stock and other investments to IRS-approved charitable organizations and get a deduction. With clothes, list them with fair values and have charities sign the list. In the case of a car, the value depends on whether the charity sells or keeps it.

For people with stocks, mutual funds or other investments that have soared in value, give shares directly to charity and get the full value as a deduction. This is smarter than selling an investment and giving cash instead to charity. Selling usually means you owe Uncle Sam for the capital gain. You avoid paying Uncle Sam for those gains if you give shares directly to the charity, including churches.

• Last-minute income slashing. Many valuable credits like the child-tax credit or the elderly/disabled credit depend on making sure your income isn’t above certain thresholds. If you anticipate being just over the threshold, you might be able to cut income down by year-end. If you have a bonus coming in December, ask that it arrive in January. If you are self-employed, you can bill a client late in December so the payment arrives in January. Wait to sell stocks or bonds that have gained, or sell another investment at a loss to offset the total gain. Unfortunately, seniors over 70½ must take minimum distributions from IRAs even if that adds unwelcome income.

• Go to the doctor.For medical expenses to be deducted, they must total 10 percent of your adjusted gross income, or 7.5 percent if you are over 65. So go to the dentist or doctor now; maybe buy glasses or prescriptions. Go to irs.gov for more information.

• Think 401(k) for easy income cutting.The easiest way to cut income is to stash more money into your 401(k) or tax-deductible IRA, or open a 401(k) or SEP IRA for a small business. Maximum 401(k) contributions are $17,500, or $23,000 if over 50.

• Get help with college costs.If you or your kids are in college or if you take a special course to advance in your job, maximize large credits. Pay enough in tuition and fees this year to get the maximum credit of $2,500 per student under the American Opportunity Credit. If you’ve maximized the credit this year, wait until next year, if you can, to pay college bills so you can get the $2,500 maximum next year. See income cutoffs and rules at irs.gov.

For adults taking extra classes, use the Lifetime Learning Credit to get up to $2,000 on $10,000 in expenses. Still saving for college? You may get a deduction on your state income taxes if you contribute to a 529 college savings plan in your state.

• Your house can help. If you receive a January bill for your mortgage or property tax, consider paying it by the end of December. Major environmental improvements like solar panels can also provide a credit up to $500.