The end of the year is nearly here, which means the deadline for filing 2008 taxes is not far behind. A couple of local certified public accountants shared these year-end tax-saving tips.

Sell underperforming stocks
Stock portfolios have plummeted this year. Once again, investors have until Dec. 31 to sell some of their losing stocks and use those losses to offset any taxable investment gain. Allow up to seven days for the stocks to be sold.

You can deduct up to $3,000 in capital losses against your ordinary income. Losses exceeding that amount can be carried over into future years. If you sell $30,000 in losing stock this year, you can deduct $3,000 each year for 10 years, explained Steve Milam, a CPA with Milam & Associates.

You cannot, however, sell stocks and deduct the loss if you purchase substantially identical securities within 31 days of the sale. This is known as the "wash-sale" rule -- meaning that your sale is ignored because it's a wash.

Also beware that mutual funds will be distributing capital gains this month, which could impact tax-planning needs.

Defer income and accelerate expenses
This tried-and-true rule continues to apply to most people, as long as they aren't in the top tax bracket. Under a new presidential administration next year, tax changes could occur, including the possibility of higher tax brackets and capital gains rates.

"Probably the best thing to do is simply proceed like you would in any other year, unless you have something extremely unusual or significant going on. Then you might want to get some other advice or counsel," said Jeffrey Frable, a certified public accountant and partner at Curzon Cumbey & Kunkel PLLC, or CCK.

One way to defer income is by having your employer postpone your holiday bonus until the beginning of next year. Self-employed people can defer income by sending year-end invoices after December to prevent being paid until next year, Milam said.

Taxpayers who itemize can accelerate expenses by paying all of their property tax in December, rather than half this month and half next year.

Double up on contributions made to your church or place of faith by paying December and January pledge amounts this month.

Consider itemizing
Itemize deductible expenses if they exceed the 2008 standard deduction of $5,450 for singles, $10,900 for married couples filing jointly and $8,000 for heads of households.

Deductible expenses can include property tax, charitable expenses and mortgage interest.

Bunch together miscellaneous items such as employer business expenses, trade journals, investment expenses, tax preparation fees, union dues, professional dues, mileage not reimbursed by your employer, for example. These can be itemized as long as they exceed 2 percent of a taxpayer's adjusted gross income.

Medical expenses can be itemized if they exceed 7.5 percent of adjusted gross income.

Clean out closets and make noncash donations to Goodwill the Salvation Army or other nonprofit organizations before year-end.

People affected by the alternative minimum tax, however, aren't eligible for certain deductions.

Set up a health savings account
The maximum contribution for this tax-advantaged medical savings account is $5,800 for a family plan, plus a "catch-up" contribution of $900 per spouse who is 55 or older. Taxpayers have until April 15 to make a contribution, Frable said.

People use the account like a credit card and pay their medical expenses out of it. The account also can be a way to save for a retirement, Frable added.It creates a tax deduction or exemption from federal income tax, depending on the specifics of the plan and who sets it up.

Education credits and deductions
Deduct up to $4,000 per student for post-secondary tuition and required fees. This doesn't apply to books, room and board, Milam said.

Education credits fall into two categories. The Hope Education Credit for college freshmen and sophomores allows taxpayers to receive a maximum $1,500 credit on tuition and required fees.

A Lifetime Learning Credit can be used by both part-time and full-time college students, regardless of their age or year of study. This credit is 20 percent of the tuition. So, if you spent $500 on a class, you could receive a $100 credit, Milam said.

Social Security benefits reductions
Married couples filing jointly can avoid having their Social Security benefits taxed as long as their modified income -- income from all sources other than Social Security -- doesn't exceed $32,000, Milam said.

Otherwise, benefits will be taxed 50 percent on the amount exceeding the $32,000 threshold. For example, on a $34,000 income, $1,000, or 50 percent, of the $2,000 exceeding the threshold would be taxed.

If a married couple's modified income exceeds $44,000 then 85 percent of their Social Security benefits exceeding the threshold would be taxed.

Control withdrawals from Individual Retirement Accounts to reduce being taxed on Social Security, Milam said.

Add to IRAs
The 2008 contribution limits for both traditional and Roth Individual Retirement Accounts are $5,000 and a $1,000 "catch-up" contribution for people 50 years and older. Taxpayers have until April 15 to contribute to their traditional IRA and qualify for a 2008 deduction. Contributions to Roth IRAs are not tax deductible.

Credit available for home buyers
First-time home buyers who bought a home between April 8, 2008, and July 1, 2009, can take advantage of a 10 percent credit, not to exceed $7,500, of the home's purchase price. But there is a catch, cautioned both CPAs. That credit, which acts as an interest-free loan, has to be repaid to the IRS over 15 years, starting the year after you get the credit.

Tax write-offs and depreciations on new equipment for business owners
Because of the complexity of tax laws, business owners should be sure to check with CPAs. In many cases, sole proprietors can write off up to $250,000 for qualified assets, although some limitations could apply.

Other provisions allow business owners to accelerate depreciation on qualified assets. They could use the 50 percent bonus depreciation on new equipment -- writing off $50,000 on a new $100,000 piece of equipment, for example -- and write off the rest using the Indian depreciation.

The Indian depreciation, which has been extended for 2008 and 2009, lets business owners accelerate depreciation on assets that have been put in service on property identified as former American Indian reservations. Most of eastern Oklahoma qualifies for this shorter depreciation life, Frable said.

Laurie Winslow 581-8466 laurie.winslow@tulsaworld.com To see more of the Tulsa World, or to subscribe to the newspaper, go to http://www.tulsaworld.com. Copyright (c) 2008, Tulsa World, Okla. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.