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Year-End Tax Moves That Can Help You Save

Here are some steps you can take to reduce what you pay

 Medical deductions. To claim a medical deduction, your medical expenses must exceed 10 percent of your adjusted gross income (or 7.5 percent if you're 65 or older). So if you need care from doctors and dentists, for example, it's wise to get treated now and "bunch up" your out-of-pocket expenses to meet the threshold, Wind says. "If you're trying to get a tax deduction, it's the best way to do it."

 Long-term care. If you itemize, you can deduct premiums for long-term care insurance: up to $1,360 if you're age 51 to 60; up to $3,640 if you're 61 to 70; and up to $4,550 if you're 71 or older.

 Home mortgage interest. Boost your 2013 mortgage interest tax deduction by prepaying one extra month's interest. It's tax-deductible for the year in which it's paid, so pay for January 2014 by late December to claim the interest as a deduction.

 Education credits. If you're attending college, or paying for a spouse or child who's enrolled, you may be eligible to claim the Lifetime Learning Credit for 20 percent of the cost of tuition and fees up to a maximum of $2,000. There's no limit on the number of years the credit can be claimed for each student. The credit may be particularly helpful to graduate students and those taking courses to improve job skills but not pursuing a degree. The American Opportunity Tax Credit is worth up to $2,500 for qualifying educational expenses (such as tuition and textbooks) for undergraduate college students. The credit is phased out for taxpayers with incomes from $80,000 to $90,000 (or $160,000 to $180,00 for joint filers) and is available only for the years 2009 through 2017. A taxpayer cannot claim both the American Opportunity Tax Credit and the Lifetime Learning Credit for the same student in one year.

 Take your distribution. If you're older than 70 1/2, be sure to take your required minimum distribution from your traditional IRA and 401(k) retirement fund. Otherwise, the amount not withdrawn is taxed at 50 percent. If you're still working and have a 401(k) through your current employer, you don't have to take the distribution until you stop working.

It's always a good idea to consult a tax professional about your situation if you're unsure about what to do.

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