With the end of the year fast approaching, you can cash in on unique tax-saving opportunities that won’t be available once Jan. 1 rolls around. It’s often a case of “do or die” when it comes to taxes. If you don’t act now, you’ll kick yourself later.

Although everyone’s situation is different, following are several strategies you might use to cut your personal tax bill at year-end.
    • Estimate your alternative minimum tax (AMT) liability. It may be possible to avoid or reduce the AMT by postponing certain “tax preference” items to 2009. Alternatively, you might accelerate income into 2008 if your AMT rate is lower than your regular tax rate.

    • Thinking about some year end investing, how about purchasing a rental property while real estate is on sale.

    • Bunch medical expenses in the year you may qualify for a deduction. Your unreimbursed expenses can be deducted only to the extent the total exceeds 7.5 percent of your adjusted gross income (AGI).

    • Avoid estimated tax penalties. No penalty is imposed if your tax payments for 2008, including withholding, equal at least 90 percent of this year’s tax liability or 110 percent of last year’s liability.

    • Consolidate personal debts into a home-equity debt. Unlike nondeductible personal loans, you can deduct the interest paid on the first $100,000 of home-equity debt, regardless of how you use the proceeds. Caveat: The debt is secured by your home, so use this technique with discretion.

    • Use capital gains and capital losses to offset each other. Depending on your situation, you may realize gains or losses at year-end. Any excess loss can offset up to $3,000 of ordinary income in 2008. Remember some capital losses from failed financial institutions are not limited to the $3,000 capital loss limit.  You may have some capital losses that do not have a $3,000 limit.

    • If you own a business, consider hiring your kids before year end and do some income splitting.

Of course, other year-end planning techniques may be appropriate or preferable for certain taxpayers. True tax planning requires an in-depth examination of your particular facts and circumstances. This will enable you to develop a comprehensive tax plan. Always speak to your tax professional prior to implementing any tax planning strategies.