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We know, the holidays are supposed to be for making merry and probably the last things you want to think about are taxes and your battered retirement portfolio. But trust us - a little advance planning can reduce the taxes you owe, and rearranging your portfolio can also provide for optimal tax savings in year ahead. Here are some useful tools and maneuvers that can be of use before the year is over.

Get Rid of Those Losers. If you have a few lemon stocks you wouldn't mind selling, now is the time - you could even sell enough to wipe out all your realized capital gains this year. But which dogs do you sell to offset your gains? Through your portfolio on Quicken.com, you can use a few Investing calculators to make a wise, informed decision on what to sell. First, see how much you'll pay in capital gains taxes by selling any stock. Then decide which stock lot you should sell to minimize those taxes. You can then narrow it down by determining how many specific shares you'll need to sell. You'll generally get the most tax bang for your buck with a short-term loss, so use our calculator for determining which of your most recent investments you should hold for less than/more than 12 months.

Plan ahead for your IRA and 401(k). There's been a lot of talk about whether investors should convert their regular IRAs into newly-created Roth IRAs. The upside to a Roth - your investment gains are completely tax-free. The downside - converting your IRA means you'll face a big tax bill. But if you move your money before the year is out, you buy yourself an extra 60 days in 2002 to decide whether the money should stay there or go back to your regular IRA. Use our Roth IRA Guide to help you make the decision. If you have a 401(k) at work, now is the time to state how much you'll contribute next year. It's also a good opportunity to make sure your account is balanced in terms of fund holdings and company stock.

Prep for Tax Season. Visit financial sites like Quicken.com's improved Tax Channel to get a jumpstart before April 15th each year. In there, you'll find ten top year-end tax tips for saving a bundle. The Tax Estimator can prepare you for how much you should expect to pay last year taxes. Some more helpful tools would be there, too. You may find more tax information at many other websites, such as godaddy.com etc.

Looking Back and Predict the Future. With the end of the year fast approaching, it's a great time to take a step back and review your financial picture for this past year - and see if there are things you could do to better manage your finances in a new year. Did you save or spend more in the past year? Did you meet your budget? How does your tax situation look for April? You can save time and effort by using tools like in quicken.com, godaddy.com, turbotax.com etc. Quicken's Reports and Graphs to review important financial details in a format that is customizable and easy to understand. Quicken includes several different reports and graphs to help you bring to life all the information you've entered into Quicken. You choose the type of report and the level of detail you want to see. Quicken has even put the 10 most-requested reports at your fingertips with EasyAnswer Reports and Graphs. With a few simple clicks you can discover how your spending has changed in a specific category, what taxable events occurred, what your investments are worth, and more. You can also have Quicken "memorize" your customized reports for your use next year or any time you'd like. saving you time and steps in the future. To find EasyAnswer Reports and Graphs in Quicken, go to the Reports Menu and select EasyAnswer Reports and Graphs.

Special Comments on Home Capital Gains: 1) Mortgage interest on loans up to $1 million is completely deductible for the year in which you own the home, pay it to buy, build or improve your principal residence plus a second home. Points, or loan origination fees, also are deductible no matter who pays them, the buyer or the seller. 2) Property tax is always deductable from your income tax. 3) Homeowners may be happy to know the tax exemption for capital gain has been raised to $500,000 for married couples from $300,000 and $250,000 from $200,000 for single owners. It can be taken every two years only if you lived in your house for full 2 years in the past 5 years. Homeowners should always keep all receipts of permanent home improvements and of mortgage closing costs. If you do have to pay capital gains taxes, these costs can be added to your adjusted cost basis. Consult your tax adviser for more information.

Have fun and good luck!

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