Remember the Alternative Minimum Tax
The increasingly burdensome alternative minimum tax (AMT) may be flagged if you recognize large capital gains, deduct a large amount of miscellaneous itemized deductions or state and local taxes, claim or exercise incentive stock options.  

Use Section 179 Deduction to the Fullest Extent Possible
For the calendar year 2006, businesses can deduct up to $108,000 of equipment, furniture, and other tangible property, subject to a phase-out rule when qualified property purchases exceed $430,000.  

Clothing and Household Charitable Deductions
Donations of used clothing and household items, including furniture and furnishings, electronics, appliances, linens and similar items made after 8/17/2006 must be in “good” or better condition to be deductible.  

529 Plan Benefits Now Permanent
The Pension Act of 2006 made permanent the current ultra-favorable federal income tax treatment of Section 529 plans used to finance college education costs, which were scheduled to sunset in 2010.  

Defer Income and Accelerate Deductions
This tried-and-true year-end strategy for reducing current year taxable income never gets old.  

Adjust Federal Income Tax Withholding
If you are going to owe income taxes for 2006, consider increasing your Federal income taxes (FIT) withholding now through the end of 2006 so that your tax payments (estimated payments plus withholdings) equal at least 90% of your estimated 2006 liability or, if smaller, 100% of your 2005 liability (110% if your 2005 AGI exceeded $150,000).