Ask Matt: Smart moves to make to minimize taxes

• Savvy investors know to start planning now to cut the tax bill for next year
• Taxes on investment gains are likely to rise in near future, so planning now can save money.
• Stocks with large capital gains might be likely candidates to be sold.

USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com.

Q: How can I prepare my portfolio for the end of the year?

A: Many investors don't think about taxes until April, but that's often too late to protect a portfolio from Uncle Sam.

Savvy investors know most of the moves that will make the biggest difference in their tax bills are to be done by the end of the year. Planning now can make a huge difference in how much tax you have to pay come tax time.

The No. 1 thing investors must consider are capital gains. Evaluating capital gains, which are taxable for most, is especially critical this year as there's a large possibility capital gains might rise by a large amount in 2013.

Investors should go through their portfolio and identify stocks with the biggest capital gains. Investors might consider locking in some gains from their biggest winners. That's because the tax on those gains this year will likely be lower than if sold next year or beyond.

Investors are still in the dark over how taxes will change, but there's a good chance they will rise sooner than later.

At the same time, investors who are able to create Roth IRAs should consider doing so. Contributions are made using money taxed at today's rates, and qualified withdrawals in the future can be taken out tax-free.