Deductions that can make a difference

The American Institute of Certified Public Accountants, with a membership topping 350,000 members, offers these tips from its members:

* If you cannot deduct a contribution to a traditional IRA, always make a Roth IRA contribution instead. Earnings on Roth IRA accounts can be withdrawn tax free, whereas earnings on traditional IRA accounts will be taxable when withdrawn.

* Make your IRA contributions by April 15. You can extend your income tax return. Contributions to an IRA, which may result in a 2007 income tax reduction, cannot be extended.

* Double-check your higher education credits.

* One advantage of a declining stock market is the opportunity to realize capital losses. These can be very helpful in offsetting gains. There's no limit on the number of carry-forward years.

* Consider contributing to education savings plans if such contributions are consistent with your personal financial plan.

* Taxpayers who do their own returns should pay attention to tax credits. Everyone focuses on deductions, but few are aware of credits, which reduce taxes dollar for dollar. Pay attention to the following: Child Tax Credit, Hope Credit, Lifetime Learning Credit, and Child and Dependent Care Credit.

* If you overpaid last year, you're over-withholding. Increase the number of exemptions.

* And, finally, something to think about after you're filed: Plan all year, not for 15 minutes before you have your return prepared.