There’s no time like the end of the year for tax planning. By making a few small adjustments, you may be able to cut your tax bill for the current year by hundreds or even thousands of dollars. Sometimes, simply pushing up a payment or postponing income by just a few days could make all the difference.

Of course, every situation is different and there are no right or wrong strategies to use across the board. For instance, if you expect to be in a higher tax bracket in 2012 than you are in 2011, you might defy conventional wisdom and accelerate taxable income into the current year.

To further complicate matters, there is a possibility—admittedly remote—that Congress might reform the tax code by the end of 2011, and your best-laid plans could be thwarted. Still, you shouldn’t hesitate to implement fundamental tax strategies. Typically, individuals may benefit from shifting charitable deductions, medical expenses, and the like, while small business owners might purchase equipment or supplies at year-end to boost deductions for 2011.

Do you think you know the basics? Here’s a brief quiz to test your knowledge.

1) If you install qualified energy-saving improvements in your home in 2011:

1. You may qualify for a 10% credit.
2. You may qualify for a 30% credit.
3. You may deduct the full cost.
4. You may depreciate the cost over time.

2) For 2011, unreimbursed medical and dental expenses:

1. Are completely deductible
2. Are completely nondeductible
3. Are deductible only in excess of 7.5% of adjusted gross income (AGI)
4. Are deductible only in excess of 10% of AGI

3) If you donate used clothing to charity, you can generally deduct:

1. The amount you paid for the clothing
2. The amount that charity receives for selling the clothing
3. The fair market value of the clothing
4. Zero

4) If you charge a charitable gift of $100 in December 2011 and you pay the credit card bill in January 2012, how much can you deduct in 2011?

1. Zero
2. $25
3. $50
4. $100

5) The alternative minimum tax (AMT) may be triggered by:

1. An overabundance of “tax preference” items
2. Failure to pay sufficient estimated tax
3. Filing separate tax returns, if married
4. Excess expenses in the last quarter of the year

6) Which of the following is not deductible by individuals in 2011?

1. State and local income taxes
2. Credit card interest
3. Miscellaneous expenses (subject to limits)
4. Casualty losses (subject to limits)

7) Which of the following is true about a holiday party for all employees?

1. A small business can deduct none of the cost
2. A small business can deduct 25% of the cost
3. A small business can deduct 50% of the cost
4. A small business can deduct 100% of the cost

Answers: 1-a; 2-c; 3-c; 4-d; 5-a; 6-b; 7-d

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