Retirement Plan Contributions. Maximize your retirement plan contributions. If you own an incorporated or unincorporated business, consider setting up a retirement plan if you don’t already have one. (It need not be actually funded until you pay your taxes, but allowable contributions will be deductible on this year's return.) 

If you are an employee and your employer has a 401(k), contribute the maximum amount ($15,500 for 2007, plus an additional $5,000 if age 50 or over, assuming the plan allows this much and income restrictions don't apply).

If you are employed or self-employed with no retirement plan, you can make a deductible contribution of up to $4,000 a year to a traditional IRA (deduction is sometimes allowed even if you have a plan). Further, there is also an additional catch up contribution of $1,000 if age 50 or over.

Health Savings Accounts. Consider setting up a health savings account (HSA). You can deduct contributions to the account, investment earnings are tax-deferred until withdrawn, and amounts you withdraw are tax-free when used to pay medical bills.

In effect, medical expenses paid from the account are deductible from the first dollar (unlike the usual rule limiting such deductions to the excess over 7½% of AGI). For amounts withdrawn at age 65 or later, and not used for medical bills, the HSA functions much like an IRA.

To be eligible, you must have high-deductible health insurance (and only such insurance, subject to numerous exceptions), and must not be enrolled in Medicare.