Net worth is not just a function of how much money you make; rather, it comes down to what you keep. The events of the past two years have made Americans as protective as ever of the money they earn. As we approach the end of 2009, there are several important last-minute money moves that, if employed, could reduce the amount of money you have to fork over to the IRS come April 15^th.

Uncovering possible tax benefits from your investments and savings likely will involve some straightforward steps and perhaps some more difficult maneuvers.

Start by reviewing capital gains and losses from investment portfolios.  You will likely have investments that are worth less than what you paid for them.  Consider harvesting certain losses before year ­end to gain a tax benefit.  The sale will help offset against your taxes owed. As with all investment decisions the sale must make economic sense.

Taxpayers who believe they may be subject to the alternative minimum tax should consider delaying payment of certain itemized deductions until 2010, such as real estate taxes. Real estate tax deductions offer no tax for those subject to the alternative minimum tax.

If you participate in employer sponsored healthcare flexible spending accounts or child care/dependent care expense plans, you should review the plans to make sure that they are not a “use it or lose it” plan. If a plan does expire by the end of the year, make sure to take full advantage of the money in the account.

If you are of the mind to advance some of your heirs’ inheritance, consider making gifts to children and grandchildren up to the maximum of $13,000 per person by the end of the year.

You still have time to utilize certain energy tax credits before the end of the year.  Clearly an improvement to the house should not be made unless necessary.  However, if you are contemplating spending money on certain improvements you should review the rules prior, especially for certain types of window and doors that may be available for credits.

Finally, you should review any need for additional payments via income tax withholding so that you can avoid a penalty for underpayment of estimated taxes.  Amounts withheld from salary are deemed to have been paid equally throughout the year and can help mitigate a penalty for underpayment.

Keep in mind that the rules impacting tax law are constantly changing. Be sure to consult your tax advisor to determine how the ideas presented here may impact you.

Article by Alan S. Weinstein

Alan S. Weinstein, a certified public accountant and former Ernst & Young tax partner, possesses a deep understanding of the unique tax planning issues facing the high-net-worth individual. Alan is a founding partner for RWE Private Wealth, Florida’s first homegrown provider of wealth management solutions for individuals, families, estates and foundations.