How to cut your tax bill

NEW YORK (CNNMoney.com) -- If a lower tax bill is on your holiday wish list, don't leave it all up to Santa. There are some things you can do, even before the new year, to cut your bill. We'll tell you all the strategies in top tips.

The AMT is a shadow tax system. Basically, people have to calculate their taxes under both the normal and the alternative AMT code. They pay whichever liability is higher. But since the AMT is not indexed for inflation and there aren't as many deductions, more and more middle class families are getting hit with the AMT tax.

By 2010, it's estimated that about 35 million families will have to pay this tax. If you live in an area with high local and state income taxes, make over $125,000 as a couple, or you have a lot of personal exemptions and itemized deductions, you may be in the Alternate Minimum Tax Danger zone.

Run the numbers with tax software or with an accountant, advises Donna LeValley of J.K. Lasser. You can also use form number 6251 at IRS.gov to calculate your risk.

There are some strategies that could help you. For instance, not making advance payments on your property taxes or holding off on taking out an equity loan to pay for college could keep you out of the danger zone.

And while some congressional leaders have pledged to rescue middle-class families from the alternative minimum tax, don't hold your breath - experts we talked to said it's unlikely that any AMT tax reform will take place.

Putting in new windows, adding insulation or buying a hybrid car before Dec. 31 will give you some tax credits this year. If you install new windows or doors or you add insulation to your home, you'll be able to claim a tax credit for up to 10 percent of the cost.

But remember, there are limitations. You can only get $200 total toward your windows. If you buy energy efficient appliances, you could get tax credits from your state or local government.

Check out energystar.gov to see what your options are. If you're more ambitious, you can get an annual credit worth up to $2,000 if you install solar panels or solar water heaters.

Putting more money into your retirement account is going to save you big time. This year, you can contribute $15,000. That's $1,000 more than last year. If you're over 50, you can put up to $20,000. That's $5,000 more than last year.

As for IRAs, the max contribution for people under 50 is still $4,000, but it's now $5,000 if you're over 50 years old. You have until April of next year to make your 2006 IRA contribution. But you only have until the end of December to contribute to a 401(k).

If you own a phone (and this includes cell phones), you're entitled to at least $30 back from Uncle Sam. The refund is payback for an old telephone excise tax the government has been making people pay for over a century.

Originally, this tax was levied to help pay for the Spanish American War back in 1898. You'll get up to $60 for families of four or more. Claiming this standard credit will be much easier than digging up your phone bills for the last 41 months and figuring out exactly WHAT you're owed.

You'll have more options this year when it comes to getting your refund check. For the first time, you'll be able to get your check split up into three accounts, like your checking, savings and IRA account. Just fill out Form 8888.

--------------------------------------------------------------

• Have a hassle-free holiday
• The tax-time bomb is ticking
• Fight back against property taxes

Gerri's Mailbox: Got questions about your money? We want to hear them! Send e-mails to toptips@cnn.com or click here - each week, we'll answer questions on CNN, Headline News and CNNMoney.com.