The end of the year is a good time to focus on tax planning and assess your financial status and goals. These strategies may help minimize your tax bill.

Thinking about your taxes will almost always give you a headache, especially around the holidays. But staying on top of your finances as the year comes to a close can mean the difference between owing thousands of dollars in federal taxes and receiving a sizable check from the government in the spring.

Martin Scoll, vice president of Life Event Services for Wells Fargo Advisors, says it is paramount to start preparing as early as possible.

"Good tax preparation and planning starts on Jan. 1," he said. "Don't wait until December to start dealing with your year-end planning. Reviewing your finances and giving some thought to your taxes in October and November will not only keep you ahead of the game, it will also likely save you money."

Here are some tax-efficient strategies to consider as the end of the year approaches.

Review your investments

n Real estate. For many people, a home is their best investment. Not only does a home typically rise in value over the long term, it also provides one of the best tax advantages out there, since the interest paid on a mortgage is generally deductible from your federal taxable income.

n Stocks and mutual funds. Scoll says it is important to give your entire portfolio a review as the year comes to an end. If you have taken a loss from some stocks this year, it might be wise to sell them off before the end of December. Losses in equity markets can be used to offset any capital gains on stocks that have been realized during the year, and any excess losses can offset up to $3,000 of ordinary income, with any remainder carried forward–for use in future years.

If you do decide to sell off stocks, make sure to do it before Dec. 31, the last day of the year the stock market is open. Getting stuck holding stocks with losses will not decrease your tax bill.

Also,–if you are–expecting capital gain to be returned from a hedge fund–in which you are invested, try to defer that event until the beginning of next year, unless you think the rates will be substantially higher next year

n Retirement. If you are receiving distributions from your qualified plan, you can roll over the entire balance or distributions in excess of any required minimum distribution into a traditional IRA. If you do this custodian to custodian or within 60 days (subject to limitations), you will not have to pay taxes on those distributions. Be sure to speak with a financial adviser before setting up the IRA account.

Give away money,

increase your deduction

People often donate money in the fourth quarter to increase their tax deductions.

"Philanthropy is definitely something to consider," Scoll said. "But there are limitations to how much you can give to charity and use the deduction."

You should talk to your tax adviser and your financial adviser before embarking on a philanthropic giving plan.

There are also other kinds of gifts you can make to reduce taxes for long-term estate planning. First, you can give up to $13,000 per donor per recipient to family members and others for 2009 without triggering gift taxes. You can also give–to your children's or grandchildren's education through 529 savings plans. You can gift $12,000 a year to a 529 plan tax-free - or better yet, take advantage of a law that allows you to give a single contribution, covering five years, to a 529 plan. That means you can give a maximum of $60,000 (five years of gifting) per donor per recipient tax-free in one year and still be able to move that money between heirs' education funds. That said, however, you must consider the investment objectives, risks, charges and expenses carefully before investing in a 529 plan.

Additional tax-saving tips

In addition to reviewing your investments, there are other strategies that can help save you money come tax time.

Scoll believes it is always cost-effective to hire a good accountant.

"Very often, a good tax preparer is going to save you more money than he is going to cost you," Scoll said. "It pays to have a smart professional help you prepare your taxes."

While spending some time at year-end preparing your taxes is a smart idea, it's also a good time to assess your financial status and goals for next year, so when the end of next year rolls around, your investment and tax planning will already be off to a strong start.

Provided by Melissa Watson, financial adviser, Wells Fargo Advisors