Open a Traditional IRA

IRAs are a great way to avoid capital gain taxes. If you have not yet opened or fully funded an IRA, you can do so today. In fact, you have until April 16th, 2011 to fully fund your 2010 Roth or Traditional IRA. Your 2010 limit is $5,000.

As you review your tax situation, if you are on the threshold of a higher tax bracket, a Traditional IRA might be a great tax move. Just as a reminder, a Roth IRA will not reduce your 2010 tax liability as you will pay taxes on that money today. Nevertheless, it still might be a better choice for you.

You might even want to consider converting to a Roth IRA in 2011.