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If you lost the benefit of a tax credit or other tax break on your 2012 tax return, start now to review how your 2013 income could affect tax credits this year. If your adjusted gross income (AGI) is too high to use certain tax breaks, consider switching investments to reduce your AGI. Consider replacing accounts earning taxable interest with tax-free investments. Invest in tax-efficient mutual funds instead of funds that usually distribute large capital gains.
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