"While most Americans are thinking about turkey dinners and holiday gatherings with family and friends, they should also take some time to figure out their tax liability so that the only surprises are in shiny packages and not in their tax bill," says John Battaglia, a director in the Private Client Advisors practice of Deloitte.  "Many Americans take time to figure out their holiday budget, but we find that not as many take time for year-end tax planning that can reduce their tax liability, which is one reason why Deloitte publishes this annual tax and wealth planning guide."

Battaglia stressed the importance of all taxpayers taking the time to do a tax liability calculation to determine their projected tax payment and identify tax savings to pursue.  For instance, a few simple steps can help taxpayers determine where they fall in terms of marginal tax rates, and also decide if they should deter or accelerate income or expenses.

"It is estimated that more than four million taxpayers are going to be subject to the Alternative Minimum Tax in 2007 and many may not realize it," Battaglia said. "When the clock strikes New Year's on January 1, 2007, it's too late to redirect and minimize their tax liability."

Deloitte's guide offers a wide range of planning tips that address multiple taxpayer scenarios.  As an example, Battaglia notes that tax and financial planning is often neglected by young professionals who, in today's fast-paced economy, may be in higher tax brackets than they realize and are missing opportunities for wealth planning, particularly as their income levels rise.  Several planning tips included in the guide to address these tax circumstances are:

Planning Tip:
Taxpayers should revisit their estimated tax/withholding strategy. If you have overpaid estimated taxes (or are expecting a refund because withholdings have been too high during the year), reducing withholdings for the remainder of the year will put more money in your pocket now, instead of waiting for a refund. However, certain limitations apply as to the number of exemptions that may be claimed, which affects the amount that can be withheld; therefore, you are encouraged to discuss your particular situation with your tax advisor prior to filing a new Form W-4 to adjust your withholding.

Planning Tip:
When a taxpayer expects to be in a higher tax bracket in future years or tax rates are expected to increase significantly in the taxpayer's retirement years, it may be more advantageous for individuals approaching retirement to invest in equities outside of their retirement accounts. By doing so they can obtain the favorable capital gains rate when they "cash in" their investment. They should also invest in taxable bonds in their retirement accounts where the ordinary income generated can be deferred. Retirement plan distributions are generally taxed at ordinary income tax rates, which can be as high as 35 percent. Taxpayers should run a multi-year tax projection to determine the best method of investing for retirement, while keeping taxes to a minimum.

Planning tips also are included for business tax liability, real estate, medical expenses and a broad range of taxable occurrences.

The 2008 Deloitte Essential Tax & Wealth Planning Guide covers the following topics:

An overview of the current tax environment, including recent regulatory changes.
Recent tax developments that may affect your tax situation this year and beyond.
Steps and general financial planning tips to consider before year-end.
A calendar of important tax planning dates.
"Year-end planning can not only help taxpayers at all income levels save money this year, it can also be a starting point for setting a smart tax course for many years to come,"  Battaglia said.  "While no one can predict what will happen next year, five years from now, or 20 years from now, one thing is certain: a little time now can result in significant tax savings."