Fiscal cliff looming? Ten tax moves to make now.

Americans are facing an unprecedented tax increase of nearly $500 billion on Jan. 1, 2013, from the so-called "fiscal cliff." Are you ready? Here are 10 year-end tax strategies I recommend:

3. Replace taxable bonds with tax-free bonds

  • close
    In this April 2012 photo, Maine Gov. Paul LePage takes a sip out of a coffee mug where a 'no new taxes' message is displayed on the bottom of the cup at his office at the State House in Augusta, Maine.
    Pat Wellenbach/AP/File
    View Caption
  • About video ads
    View Caption

Because it’s tax-free, a municipal bond paying 3 percent is equal to a taxable bond paying 4.6 percent in the 35 percent bracket. It will be equal to 5 percent in a 39.6 percent bracket.

Taxpayers in higher brackets should move to municipals in their nonqualified (taxable) accounts.

3 of 10