by Sara Nunnally, Insiders Strategy Group

Have you seen this holiday season’s Acura commercials? Like the one where the caroling family wants to show off a bit, so they hire Bette Midler to carol with them?

In all the extravagance, Acura wants you be more reasonable.

In other words, buy an Acura, not a Lexus.

The tag line for these commercials is “The Season of Reason: Acura invites you to oversave.”

But that’s not quite true, is it? You’re not saving money by buying a less expensive car… You’re buying a less expensive car.

And let’s get even more real… Acura’s least expensive car starts at $29,810, or more than a year’s worth of tuition at a private four-year college, or more than 3.5 times in-state tuition for public four-year colleges. (On average for the 2011-12 year, according to CollegeBoard.com.)

And the second you drive that car off the lot, it drops in value…

So much for “oversaving” and sound investments. Indeed, buying things that decrease in value, like cars or boats, is a big no-no for folks on the edge of retirement. You’re tying up cash in an investment that won’t give you a return, and you’re missing out on padding your nest egg or stock portfolio.

And when it comes to the end of the year, you want to have as much flexibility in your nest egg as possible.

The end of the year is a time for cleaning house, getting rid of losers and taking the tax breaks that come with them.

Here’s what I mean.

If you have a losing investment in your portfolio, and you sell that investment for a loss by the end of the year, you can write off those losses on your tax return.

It’s called tax-loss harvesting, and it can really save you money on next year’s taxes. Here’s a good example of how it works. Let’s use nice big round numbers.

Let’s say you invested $100,000 into Dow Chemical Co. (DOW:NYSE) at the beginning of the year. But now DOW has lost nearly 25% since January. That means you’re only holding $75,000 in your DOW position.

If you were to sell DOW at $75,000, you could write off $25,000 in losses against your capital gains income.

That’s a huge savings…

And you can re-invest that $75,000 right back into the market. Here’s the caveat. You can’t buy Dow Chemicals again for 30 days. This is called the wash-sale rule, and you could lose your chance to write off those losses if you break it. And the other thing is the write off will only affect your personal “ordinary” income by $3,000 ($1,500 if you’re married).

For most investors, though, tax harvesting can be very helpful, especially if you’ve taken a lot of gains off the table this year.

If you made $30,000 from your other investments, you’d only have to pay taxes of $5,000 of that amount. That’s great news for folks in retirement and still managing their portfolio.

So this season, go through your investments and clean house. You might save a bundle come tax time.

But hurry, this offer ends on Dec. 31, 2011!

P.S. To learn more about how you can get financially fit for 2012, sign up for your free report “5 Profit Makers for 2012″ You’ll also receive Inside Investing Daily, the premier investment e-letter providing in-depth research, forward-thinking investment opportunities and tips to help build your portfolio. Both the report and e-letter are free, so sign up today!

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