Get lucky: 13 tax moves in '13 / Strategy: Here are 13 ways to cut taxes midway through the year.

Business Management Daily writes: Actually, luck has little to do with it. Good tax planning is about putting yourself in the best possible position.   Strategy: Here are 13 ways to cut taxes midway through the year. Several of these tax breaks were extended by the American Taxpayer Relief Act (ATRA) passed at the beginning of this year.

1.  Harvest capital gains or losses. Have you already picked off winners from securities sales in 2013? Any capital losses realized between now and the end of the year can offset those capital gains plus up to $3,000 of ordinary income. (Any remaining loss is carried forward to 2014). Reminder: The maximum 15% tax rate on long-term capital gains jumps to 20% for single filers with income above $400,000 and joint filers with income above $450,000. Short-term gains for taxpayers above these thresholds are taxed at rates reaching as high as 39.6%.
Tip: You might also have to pay a 3.8% Medicare surtax on certain investment income.

2.  Stay within vacation home boundaries. If you rent out your vacation home when you’re not using the place, you can generally use your expenses to offset rental income. But you can’t claim a loss on the deal if your personal use of the home exceeds the greater of 14 days or 10% of the time the home is rented out. Don’t cross the 14-day/10% limit this summer.
Tip: If you spend a day fixing up the home, it doesn’t count as a “personal use” day, even if the rest of the family comes along strictly for pleasure.

3. Pile on equipment purchases. Under Sec­­tion 179 of the tax code, you can currently deduct up to $500,000 of qualified business property placed in service this year (subject to a phaseout threshold of $2 million). These thresh­­olds were extended through 2013 by ATRA. Absent any new legislation, the maximum Section 179 deduction will plunge to $25,000 next year (with a $200,000 phaseout threshold).
Tip: ATRA also preserves 50% bonus depreciation for qualified property placed in service before 2014.

4. Dust off charitable deductions. As a general rule, you can deduct the fair market value (FMV) of property you donate to a qualified charitable organization if you’ve owned the property for more than a year.
Tip: Organizations like the Salvation Army and Goodwill provide guidelines for valuing used clothing, furniture and other items.

5. Cool off with an energy credit. The 10% residential energy credit, which had technically expired after 2012, was revived retroactive to 2012 and extended through 2013. It covers energy-saving improvements installed in your home this summer like central air conditioning and advanced main air circulating fans, as well as insulation materials; exterior windows and skylights; exterior doors; natural gas, propane and oil water heaters or furnaces; water boilers; electric heat pump water heaters; biomass stoves; and certain metal roofs.
Tip: A lifetime credit maximum of $500, as well other specific limits, applies to qualified expenses.

6. Enjoy tax perks for business trips. If you travel away from home, you may deduct your travel expenses—including airfare, lodging and 50% of the cost of meals—when the primary purpose of the trip is business-related. But the number of days spent on business vs. pleasure is crucial, so watch how you spend your time. Keep it heavily weighted toward business activity.
Tip: If your spouse accompanies you, his or her expenses are generally not deductible, but you may still deduct what it would have cost you to travel alone if that’s more than half the cost.

7. Dodge the ‘wash sale’ rule. The wash sale rule has nothing to do with laundry. Essentially, if you acquire securities within 30 days before or after selling “substantially identical” securities at a loss, you can’t deduct the loss on your 2013 tax return.
Tip: Alternatively, you could buy the securities first and wait at least 31 days to sell the original shares.

8. Seek out dividend-paying stocks. Generally, qualified dividends continue to be taxed at a maximum 15% rate, although a 20% rate applies above the same income thresholds as for long-term capital gains. Add dividend-paying stocks to your portfolio if you can benefit from the 15% rate.
Tip: To qualify for the favorable tax rate, you must meet a 61-day holding period.

9. Shoot for tax breaks on the links. If you entertain clients at your country club before or after holding a “substantial business meeting” with them, you can deduct 50% of expenses such as greens fees, cart rentals, club rentals, and 50% of your meals and drinks. (But no deduction is allowed for country club dues even if you use the club often for business entertaining.)
Tip: If the client is from out-of-town, the business discussion can take place the day before or after the entertainment.

10. Sign up for worker credits. The Work Opportunity Tax Credit (WOTC) for hiring disadvantaged workers, which technically expired after 2011, was revived by ATRA retroactive to 2012 and extended through 2013. Normally, the WOTC is equal to 40% of the first $6,000 of wages (maximum $2,400 credit per qualified worker).
However, if your firm hires qualified individuals age 16 or 17 for the summer, it may also benefit from a credit equal to 25% of the first $3,000 of wages (maximum credit of $750 per qualified worker).
Tip: The summertime credit only applies to services performed between May 1 and Sept. 15.

11. Give generous gifts to grads. Generally, you can claim a $3,900 dependency exemption for a child graduating from college if you provide more than half of the child’s support. Figure out where the half-support mark will be for your child in 2013. If a generous graduation gift puts you over the top, do it.
Tip: The usual “gross income” test for dependency exemptions doesn’t apply to a child who is under age 19 or is a full-time student under age 24.

12. Send the kids to day camp. If you pay someone to watch a child under age 13, you may qualify for the dependent care credit. The credit for most parents is equal to 20% of the first $3,000 of qualified expenses for one child; $6,000 for two or more children. The cost of day camp in the summer months qualifies.
Tip: No credit is available for overnight camp.

13. Avoid underpayment penalties. Generally, you must make timely payments of tax through any combination of withholding and quarterly “estimated tax” payments. But you won’t be hit with a penalty if you pay at least 90% of your current tax liability or 100% of the previous year’s tax liability (110% if your adjusted gross income was more than $150,000 last year).
Tip: The second quarterly installment due date is June 15 (only two months after the first one).