I know, I know. You just can't wait until tax time -- who could blame you? We're all itching to start filling out our 1040s. But let's face it -- that's still a few months away. You're not completely out of luck, though, because in some ways, December is an important tax time, too. It's your last chance to engage in some strategic tax-minimizing moves.

Here are a few things you might want to consider doing:

  • Contribute appreciated stock to your favorite charities instead of cash. (And by the way, we'd love to introduce you to some compelling and worthy organizations, via our annual Foolanthropy drive. Please click to learn more about them.) If you've held shares of a stock for more than a year, you'll avoid paying tax on the appreciation, and you can still deduct the full value of the stock. Call your favorite nonprofits; the folks there will probably be able to help you with this.
  • If you'd like some extra deductions this year (perhaps because your income is higher this year than you expect it to be next year), consider bundling some expenses. For example, if you typically give a lot to charity at the end of each year, you might go ahead and make your 2007 contributions now, as usual, but also make your 2008 contributions now.
  • Meanwhile, if you're expecting a big bonus in the weeks ahead, you might ask your employer to pay it to you in January, thereby deferring that payment and lowering your taxable income for 2007. If you bill others for your income, you might choose to delay sending out some bills until January.
  • Review your capital gains and losses and consider taking some losses now, to offset some gains. (This summary can tell you more.)
  • Don't overlook valuable credits that might be available to you. If you pay someone to care for your child under age 13 so that you can work, you might be eligible for the Child and Dependent Care Credit. The Child Tax Credit can save you up to $1,000 per qualifying child under the age of 17. The Hope Credit offers savings of up to $1,650 per student for qualified tuition and fees paid by or for the student. The Lifetime Learning Credit offers up to $2,000. (Learn more from the IRS.) If you've recently adopted a child, you may be able to enjoy a credit of up to $10,960. (Learn more about it.)
  • If you're 70 1/2 years old or older and you have a traditional IRA, you should be taking your required minimum withdrawals annually. Don't forget to do so. And by the way -- if you're not on top of your retirement planning, there are few more critical things you could do before the year ends. Let us help you. I encourage you to take advantage of a free 30-day trial of our Rule Your Retirement newsletter service, which distills what you really need to know into a manageable volume each month.

Here's one last tip: Be tax-smart with your mutual funds. If you're planning to sell one in the near future, check to see whether it has made its dividend and capital gains distributions, which often happens near the end of the year. If it hasn't, selling soon, before it does so, means you can avoid paying taxes on those distributions. You might even sell some funds you'd like to keep to avoid the distributions, buying them back after at least 31 days elapse. (That's an IRS rule.) Meanwhile, if you want to buy into a fund, perhaps wait until after the distribution. You can call your fund company to ask about the distribution date.

For example, I own some shares of the Oakmark Select I (OAKLX) fund, which holds stock in companies such as McDonald's (NYSE:MCD), Time Warner (NYSE:TWX), Texas Instruments (NYSE:TXN), Yum! Brands (NYSE:YUM), and Raytheon (NYSE:RTN). It made its distributions on Dec. 13, which meant $3.11 in long-term capital gains per share, $0.23 in dividend income, and $0.00 in short-term capital gains.

So there you have it -- a little action now can save you a lot of money down the road.

Even more tips
Here are some additional tips for you, including making the most of losses in your portfolio:

Be sure to drop by our Tax Center for even more guidance -- and gobs of useful articles.

Longtime Fool contributor Selena Maranjian owns shares of Time Warner, McDonald's, Yum! Brands, and Oakmark Select I. Time Warner is a Motley Fool Stock Advisor recommendation. Oakmark Select I is a Champion Funds selection. Try any of our investing services free for 30 days. The Motley Fool is Fools writing for Fools.