1. Your fourth quarter estimated tax payments are due January 15 th. If you are paying late, interest charges are due April 15 th – with your income tax filings.

2 . Alert: This year’s AMT tax “patch” remains uncertain. The fix or “patch” is caught up in a high-stakes battle over whether the $50-billion needed to pay for the relief should be offset by tax increases to the wealthy. President Bush vows to veto legislation increasing taxes on corporate America to pay for the patch. Without legislation, the AMT tax will impact 22-million taxpayers, whose 2007 tax bill will jump between $2,000 and $5,000! In 2006 Congress approved a one-year fix in the middle of the night during the legislature’s last session. Congress’ last day of official business this year will be Friday, December 21st. To avoid delaying release of our yearend newsletter, The Tax Practice will post news of Congress’ actions on our website, www.taxpractice.com, December 24th.

Internal Revenue announced this month, if a fix is approved, millions of taxpayer refunds will be delayed until mid-February in order to update software programs to reflect the change.

3 . Tax planning opportunity. Beginning 2008 through 2010, taxpayers age 24 or older may qualify for a zero capital gains tax rate. The exemption applies to total taxable income below approximately $32,000. To reduce your tax exposure, evaluate gifting highly appreciated assets to adult children with taxable incomes under the qualifying sum.

4. Home foreclosures and cancellation of debt. Foreclosures are up dramatically. Due to the sub-prime lending frenzy, an estimated 2.5-million homes will be foreclosed upon in the next two years. Without Congress intervention, many homeowners may be facing large income tax liabilities if they lose their home to foreclosure, or sale proceeds are less than amounts borrowed against the property. If refinanced debt exceeds the value of the home, taxpayers may have taxable income representing the difference between total debt and the value of the home. We recommend seeking professional advice to determine exposure and/or mitigating circumstances precluding tax exposure.

5. Standard mileage rates set for 2008. Business mileage 50.5 cents/mile; charitable mileage 14.0 cents/mile; medical and moving mileage 19.0 cents /mile.

6. Maximum Contributions to Retirement Plans for 2008. IRAs (regular and Roth) $5,000, age 50+ $6,000. 401(k) and 403(b) accounts: $15,500, age 50+ $20,500. SIMPLE IRAs $10,500, age 50+ $13,000. SEP-IRA and Solo-401k $46,000.

7 . California Registered Domestic Partners. If you filed for registered domestic partner (RDP) status in 2006 or 2007, your 2007 California income tax filing must follow married filing joint or married filing separate filing rules. In some instances, a partner may qualify for head-of-household status. Partners are required to continue filing their federal income tax returns under single filer status. See www.sos.ca.gov/dpregistry for RDP filing details.

8. Deductible IRA/Roth contributions (2007). For one-income couples, the maximum income allowed for making deductible or Roth contributions was raised by $6,000 ($156,000-$166,000). Single filer income threshold for allowable Roth contribution was raised $4,000 ($99,000-$114,000).