Capital losses on the sale of stocks, bonds or mutual fund shares can offset realized capital gains on such investments. If your losses are greater than your gains, or you did not have any gains for 2007, you can deduct as much as $3,000 a year from your wages and other ordinary income. The limit is $1,500 for married couples filing separately. Any unused loss can be carried forward into future years to be used. You will want to watch for transactions called "wash sales" which typically happens when you sell a security at a loss and, within 30 days before or after the sale, you buy the same thing or something  "substantially identical." If you discover you did participate in a wash sale, you cannot deduct your loss. However, the disallowed loss on the trans action is added to the cost of the newly acquired security and the result is an increase in the basis of the new security.

Much tax savings can be obtained by fully participating in retirement plans available from your employer such as a 401(k) or 403(b) plan.

Check with the human resource department where you work to see if you are participating at the maximum level and certainly to the extent the employer will match your contributions.

Business owners can shelter their profits from their business in a qualified retirement plan. Sole proprietors can create 401(k) plans and contribute to their retirement while obtaining substantial retirement savings. The maximum annual 401(k) plan contribution through a salary reduction is limited for 2007 to $15,500. If you are age 50 or older by the end of the year, an additional $5,000 CATCH UP contribution is allowed However, if you work for an employer who provides participation in a 401(k) and you are also self-employed, the overall elective contribution cannot exceed the annual limit.

If you participate in a 401(k) plan through your employment and you also have profitable business from self-employment you can use a Simplified Employee Pension plan account, SEP, to shelter business income.

Seniors who continue to have earnings after age 70 ½ can contribute to a Roth IRS. You would be required to have a modified adjusted gross income below $156,000 for a married couple filling jointly. For a single individual filing the amount is $99,000 to make a full contribution of $4,000. The $4,000 could be supplemented by an additional $1,000 as a CATCH UP contribution.