It's time to plan for 2008 tax return

Don't think just because you've filed your income tax return that you can forget about taxes until next year. The real fun starts now, when you can look at your return to make decisions about tax moves in 2008.

When people file tax returns, usually there are a few surprises, good and bad. Suppose you had excessive losses with stock sales. If that amount is more than $3,000, you had to carry over the rest of the losses to next year. That means if you make gains this year, they can be offset by those 2007 losses. So you can look for opportunities to sell winners and reduce the tax bite.

For those in higher tax brackets, a surprise might have been too many distributions from mutual funds, such as short-term gains counted as ordinary income. To reduce those payouts, consider an exchange traded fund that's equivalent to that fund. Just be careful with ETFs, because they carry a stock-trading fee and aren't efficient for frequent traders or contributors. But lump-sum contributors can reap lower expense fees in many cases.

For those in lower tax brackets, taxes may have been even lower if contributions were made to retirement plans last year. By taking advantage of the retirement savers credit, not only are retirement funds benefiting for the future, but taxes are lower in the present. Starting contributions to IRAs or 401(k)s now can lower your taxes next year.

To manage investment gains and losses more tax-efficiently, consider putting retirement funds in a nonretirement account, such as a brokerage account or individual mutual fund account. Just because the money is for retirement doesn't mean it needs to be in a retirement account. By having this individual account, you can receive tax benefits now while saving for the future.

Buying a stock in a regular brokerage account in January and finding it down 20 percent in December allows you to sell it for a capital loss for the current tax year. You can move the money to other investments as part of rebalancing or wait 30 days and reinvest. If the money is put back within 30 days, it is subject to the IRS's wash-sale rules, which means the loss is not allowed. If you found yourself bumped into a higher tax bracket, consider municipal bonds, which are exempt from federal taxes and often from state taxes, too.