With the end of the year approaching, it’s time for strategic moves to lower your 2015 tax bill. This is the second installment of our two-part series on the subject. For the first part, see How to cut your 2015 tax bill.

Strategy: Prepay deductible expenditures

If you itemize deductions, accelerating some deductible expenditures into this year to produce higher 2015 write-offs makes sense — if you expect to be in the same or lower tax bracket next year. See the table at the end of this column for the 2015 federal brackets. The bracket cutoffs for next year will be just a few dollars higher, thanks to small inflation adjustments.

January house payment 
Accelerating the house payment that is due in January will give you 13 months’ worth of deductible interest in 2015 (unless you’ve already been following the prepayment drill). You can use the same strategy with a vacation home.

State and local taxes 
Prepaying state and local income and property taxes that are due early next year can reduce your 2015 federal income tax bill because your total itemized deductions will be that much higher.

Medical expenses and miscellaneous deduction items 
Consider prepaying expenses that are subject to deduction limits based on your adjusted gross income (AGI). AGI is the number at the bottom of page 1 of your Form 1040. It includes all taxable income items and a few write-offs such as the ones for alimony paid and moving expenses. The two prime AGI-sensitive candidates for the prepayment strategy are medical expenses and miscellaneous itemized deductions.

• Medical expenses are deductible only to the extent they exceed 10% of AGI for most people. However, if you or your spouse will be 65 or older as of year-end, the deduction threshold is a more-manageable 7.5% of AGI.
• Miscellaneous deductions — for investment expenses, job-hunting expenses, fees for tax preparation and advice, and unreimbursed employee business expenses — count only to the extent they exceed 2% of AGI. If you can bunch these kinds of expenditures into a single calendar year, you’ll have a fighting chance of clearing the 2%-of-AGI hurdle and getting some tax savings.

Warning: Prepaying is not a no-brainer 
The prepayment strategy can backfire if you will owe the alternative minimum tax (AMT) for this year. That’s because write-offs for state and local taxes are completely disallowed under the AMT rules and so are miscellaneous itemized deductions. So prepaying these expenses may do little or no tax-saving good for AMT victims. Solution: ask your tax adviser if you’re in the AMT mode before prepaying state and local taxes or miscellaneous deduction items.

Strategy: Accelerate charitable giving

Prepaying charitable donations that you would otherwise make next year can reduce your 2015 federal income tax bill because your total itemized deductions will be that much higher. Donations charged to credit cards before year-end will count as 2015 contributions.

Donate appreciated stock; sell losers and donate resulting cash 
If you have appreciated stock or mutual fund shares (currently worth more than you paid for them) that you’ve held in a taxable brokerage firm account for over a year, consider donating them, instead of cash, to IRS-approved charities. You can generally claim an itemized charitable deduction for the full market value at the time of the donation and avoid any capital gains tax hit. On the other hand, don’t donate loser stocks. Sell them, book the resulting capital loss, and donate the cash sales proceeds. That way, you can generally deduct the full amount of the cash donation while keeping the tax-saving capital loss for yourself.

Remember: You must itemize deductions to gain any tax-saving benefit from charitable donations, except for donations out of an IRA, as explained later.