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Tax Planning

The Real Work Begins

You can save money on your 2007 taxes by taking advantage of these opportunities throughout the year.

Editor's note: This is the transcript of Kiplinger Editorial Director Kevin McCormally's commentary on the April 17 broadcast of Nightly Business Report.

With the 2006 tax deadline just a few hours away, it's time to start working on 2007. I want to quickly tick off a few of the many opportunities you may have in the months ahead to cut our own taxes:

  • Take full advantage of your retirement plan at work and fund an IRA if you can.

  • If you're 70#189; or older, remember that this is the last year you can take your required minimum distribution from an IRA tax-free ... if you give it directly to charity.

  • If you buy a home in 2007, there's a one-time-only chance to deduct the cost of private mortgage insurance.

  • If you plan a significant charitable contribution, be sure you understand how giving appreciated securities instead of cash can be a win/win situation for both you and the charity.

  • If you're a landlord looking to upgrade, consider whether a tax-free swap makes more sense than a taxable sale and a subsequent purchase.

Congress has crammed the tax law with opportunities to save money. It's up to you take advantage of them.

And, one last point: If like most taxpayers you got a fat refund this spring, march into your company's payroll office tomorrow and fill out a new W-4 form. Reducing the amount that's withheld from your paychecks will let you get next year's refund in installments ... starting next pay day.

See Kevin's previous tip.