Most people don't like to think about income taxes and consider it an annual chore to file a tax return. Another way to look at tax planning is to see it as a means to possibly save money and certainly reduce the stress of tax time. Let's review a few simple tips that you can implement during the year to help save money.

Should I itemize deductions or just take the standard deduction?
Many people fail to keep good records to determine the true about of their itemized deductions, opting to take the path of least resistance and claim the standard deduction. The best approach is to keep detailed records and calculate your legitimate itemized deductions such as medical expenses, taxes (including state income tax, real estate tax and property taxeS), mortgage interest, charitable contributions and other miscellaneous itemized deductions. If this amount is greater than the standard deduction, your choice is clear.

However, another opportunity arises when your itemized amounts consistently fall short of the standard deduction. If this happens, you may be able to time certain deductions to work to your benefit. For example, you can group certain expenses into one year and itemize for that year; the next year you take the standard deduction, and the year after that, you can itemize again. How can you group your expenses? Property taxes are just one example. Most real estate taxes are due by Jan. 5, so you can double up by paying the tax in January of year one and paying the next year's tax in December of the same year. Contributions and state estimated tax payments can be handled in the same way. Proper timing of meidcal costs such as glasses or hearing aid purchases can also make a difference.

Get a deduction from your spring cleaning.
Donating used clothing, furniture and household items can result in tax savings. Many people fail to recognize that a little effort in this area can really pay off. By keeping an inventory of non-cash items donated to organizations such as Goodwill, Salvation Army or ReStore, you will realize that you generally have given a greater amount than anticipated. Donations of clothing and household items should be in "good used condition or better." You receive a deduction based on the fair market value of such items; generally this is a thrift store or yard sale value. Be sure to keep receipts and detailed listings of items donated. Also keep in mind you must file Internal Revenue Service (IRS) Form 8282 for peroperty contributed that is valued over $500.

Review your portfolio for tax efficiency.
Not all investment income is created equally or taxed equally. Qualified dividends and long-term capital gains are taxed at rates less than interest income and short-term capital gains. Review your portfolio to make sure it is structured in a way that is both tax efficient and adequate for your personal situation. Failure to coordinate your investment planning with your tax planning can result in paying a lot more unnecessary tax.

Don't overlook a mileage deduction.
While record keeping your milage for business, charitable purposes and medical purposes is a pain, it is imperative to keep this information. It is especially important when the IRS changes the rates during the year. For 2011 there are two rates for each category, one from Jan. 1 to June 30, and one from July 1 to Dec. 31. Rates for business miles driving for these periods are 51 cents / 55.5 cents; for medical and moving purposes 19 cents / 23.5 cents, and since charitable mileage is set by statute and not the IRS, it remains at 14 cents per mile throughout the entire year.

These are just a few simple tips that can pay off; the bottom line is that you can recognize savings by proper planning througout the year. Talk to your tax advisor about the planning oppotutnities for your situation. Be sure to take into account your advisor’s schedule; don’t wait until the last week of December to start planning. We all recognize that this is a hectic time for everyone and if you wait that long, you will start at the back of a long line with a short time frame to accomplish your objectives.