The following report by Call 4 Action reporter Meghan Jones first aired Dec. 26, 2005, on Channel 4 Action News at 6 p.m.

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Paying less in taxes involves a two-step process: minimize your income and increase your deductions.

Tip No. 1: Pay your fourth quarter local tax now. To take the deduction in 2005, payment is not due until Jan. 15 or Jan. 31.

"So, it gives you some flexibility, a bundling if you will, and you get a little more deductions," said Bob Grossman.

Grossman, a certified public accountant, says you may also want to get in a charitable state of mind.

Tip No. 2: Make charitable contributions for next year by Dec. 31. There is no extension like last year.

"By accelerating some of the contributions that you might otherwise have next year into the current year, that's especially important of you have a higher tax year this year than you expect next year," said Grossman.

Tip No. 3: Start your New Year's resolution to lose weight this week.

If you join any program to lose weight because a doctor prescribed it to treat obesity, you can deduct the fees as a medical expense.

Tip No. 4: Sell stocks that have lost money. You can use the losses to offset capital gains tax.

Tip No. 5: Defer a portion of your income by putting money aside in a 401k or other similar account. If you already do, put more money away. Here's the catch: if it is sponsored by your employer, you have to do it now. If you don't have time, don't worry. You can open an IRA.

"The time to do that could be as distant as April 15, because it does not have to be done in year end," said Grossman.

Here's one last tip -- if you were thinking about buying a clean fuel-burning vehicle -- like a hybrid -- you might want to do that in the next few days. You can receive a $2,000 deduction on your taxes.

But, beginning in 2006, the deduction will only be $500, and there will be no deduction beginning in 2007.