It might be a little too late in the game but I'm wondering what I can do now to increase my deductions for 2012? My wife and I file jointly and contribute regularly to 401(k). We haven't received W2's yet so we aren't sure whether we should contribute more towards 401(k) to switch to a lower bracket.
It is not clear, because of the uncertainty of the fiscal cliff negotiations, weather it is better to bundle the deductions into 2012 or 2013. If the tax rates, allowable deductions, phaseouts, and the AMT levels were known it would be easy to suggest possible actions. But rates could go up, or stay the same.
Besides IRA, charitable deductions, and prepaying your taxes, you could also:
Which of of these you do will depend on how you expect the rates to change.
Remember the bracket you are in only impacts your last dollar earned, it doesn't lower the tax rate on all your income. Deducting $1,000 in the 25% bracket saves you $250 in taxes, deducting $1,000 in the 28% bracket saves You $280
Unless you have a paycheck coming on Monday December 31 and have already made arrangements to have a substantial portion of that go to your 401k, you are most likely out of luck on that front: payroll may already have processed your last paycheck. 401k contributions have to be withheld from your salary and be sent directly from your employer to the 401k plan administrator; you can't send the 401k administrator any money for deposit into the 401k plan. You have till April 15, 2013 to make a 2012 contribution to your Traditional IRA which will reduce your taxes for 2012, but the 401K cutoff is December 31.