If you are at least 70 by December 31, 2007, you must begin taking required minimum distributions (RMD) from your retirement account on an annual basis. However, if the current year is the one in which you reach age 70 , you are allowed to defer distributing this years RMD until April 1st of the following year. If you do defer your RMD, you must distribute two RMD amounts in the following year. Since these distributions are usually taxable, the two distributions in one year can put you in a higher tax bracket. Also, the excess-accumulation penalty for failure to withdraw your RMD by the applicable deadline is 50% of the shortfall.
If you dont really need the money, then consider making a charitable contribution instead. The IRS allows a $100,000 a year of IRA money donated directly to charity by IRA owners who face mandatory distributions. This amount will not be reported on your tax return as income as well as an itemized deduction.
Through the Energy Tax Incentives Act of 2005, qualified homeowners may claim a federal tax
credit for making certain energy-efficient improvements to their principal residence (second homes do not qualify). Some of the home improvements that would qualify for these credits include adding insulation, replacing windows, and adding certain high efficiency heating and cooling equipment. These energy-efficient improvements must be expected to remain in use for at least five years. This tax credit only applies to improvements made to your primary residence from January 1, 2006 through December 31, 2007. The maximum amount of homeowner credit for all improvements combined is $500 during the two year period.

Fixed assets are generally depreciated over the useful life of the asset. However, businesses can take advantage of the Section 179 deduction, which allows a business (or self-employed individuals) to deduct up to $125,000 in 2007 of qualified purchases in the year of the purchase. Examples of qualified asset purchases are machinery, equipment, furniture and fixtures, computers and software. Buildings, structural components, rental and investment properties (including the above examples used in rental activities) are not eligible for Section 179 treatment.
There are additional guidelines for Section 179 deductions. First, qualified asset purchases must be placed in service by December 31, 2007 to be eligible for the deduction. Second, the deduction begins to phase-out when total qualified purchases exceed $500,000 for 2007. Finally, you can only utilize Section 179 deduction to the extent of your income. Any unused Section 179 deduction due to income limitations may be carried forward to subsequent years.

The following standard mileage rates for the use of a vehicle will go in effect as of January 1, 2008:
•    50.50 cents per mile for business miles driven
•    19.00 cents per mile driven for medical or moving purposes; and
•    14.00 cents per mile driven in service of charitable contributions.
The new rate for business miles compares to a rate of 48.50 cents per mile for 2007. The new rate for medical and moving purposes compares to 20.00 cents in 2007. The rate for miles driven in service of charitable organizations has remained the same.
Also, a taxpayer may not utilize the business standard mileage rate for a vehicle that has already claimed a depreciation deduction or has already claimed a Section 179 deduction.

New substantiation rules took effect for cash and noncash contributions made as of August 17, 2006. For most taxpayers who file their returns on a calendar-year basis, this new rule applies to contributions made in 2007.

A taxpayer must support any cash, checks or other monetary contributions, regardless of the amount. Support includes a bank record, receipt, letter, or written communication from the charity showing the name of the charity and the date and amount of the contribution. Contributions made by a payroll deduction may be supported with an employer-provided document (i.e. paystub, Form W-2) showing the total amount withheld for charity, along with the pledge card showing the name of the charity.

Donations of clothing and household items must be in good used condition or better to be deductible. Household items include furniture, furnishings, electronics, appliances, and linens.

The two most common types of individual retirement accounts (IRAs) are traditional IRAs and Roth IRAs. There are common rules that apply to both types, however there are also significant differences between them that, in some cases, give Roth IRAs an advantage over traditional IRAs.
The maximum contribution amount for both IRAs is $4,000 per year ($5,000 if age 50 or over). To be eligible to contribute to either types, individuals or their spouse must have earned income equal to or greater than the contribution amount. Contributions must be made on or before April 15th of the following year.
The main difference between a Roth IRA and a traditional IRA is that contributions to a Roth IRA are made on an after-tax basis but withdrawals are generally tax-free. The following are some of the advantages a Roth IRA has over a traditional IRA:
•    Income tax is never paid on the earnings on a qualified distribution.
•    Distributions are not required to be taken at age 70 and contributions can continue to be made after age 70 .
•    Distributions before age 59 are first treated as a nontaxable return as long as distributions do not exceed contributions. This provides more flexibility to withdraw funds.
•    The adjusted gross income (AGI) limits for Roth IRA contributions are $156,000 to $166,000 (phase-out) for married filing jointly or $$99,000 to $114,000 (phase-out) for single or head of household which is higher than the AGI limits for a traditional IRA contribution.
•    Contributions to a Roth IRA can be made by individuals who are already covered by an employer-sponsored plan.
Distributions made from your individual retirement account or qualified retirement plan before age 59 are taxed subject to a 10% early withdrawal penalty plus taxed at the individuals ordinary income tax rate.
However, there are exceptions to the 10% early withdrawal penalty on certain types of the distributions.If the early distribution is made for the following reasons, then it will not be subject to the 10% penalty.

Interest paid on debt to acquire, build or improve your residence is considered mortgage interest, deductible by individual taxpayers as an itemized deduction.  The two types of mortgage interest are interest on qualified acquisition debt and interest on home equity debt.  
Acquisition debt is incurred by the acquisition, construction or improvement on your personal residence and your second residence as long as it is used for personal purpose.  The debt also needs to be secured by the residence.  The mortgage interest deduction is limited to the interest incurred up to $1 million in total acquisition debt ($500,000 if married filing separately).    
In addition to the acquisition debt, interest on a home equity debt that does not exceed $100,000 is deductible as long as the debt is secured by a principal residence and does not exceed the equity in your house.  The interest is generally deductible as a qualified mortgage interest regardless how the proceeds are used on the home equity debt.  
Beginning in 2007, qualified mortgage insurance premiums paid from 2007 through 2010 are also deductible as a qualified residence interest.  The mortgage insurance must be in connection with a home acquisition debt, the mortgage insurance contract must have been issued after 2006 and premiums must be paid before 2008 for coverage in effect during 2007.  The mortgage insurance premium deduction phases out for taxpayers married filing jointly with adjusted gross income of $100,000 ($50,000 for married filing separately) for 2007.

No gifts taxes are imposed on the first $12,000 in gifts that are made to any person during 2007 or 2008. This exclusion from federal gift taxes is known as the annual gift tax exclusion. If gifts to one person were valued at more than $12,000, the total gifts must be reported and taxes may be paid on the gifts. The person who receives the gift does not have to report the gift as income nor pay gift or income tax on its value.
Gifts generally include money and property, including the use of property without expecting to receive something of equal value in return.
The following are gifts that are not taxable and do not count against the annual gift tax exclusion:

•    Tuition or Medical Expenses (paid directly to an educational or medical institution for someone's benefit)
•    Gifts to your Spouse
•    Gifts to a Political Organization for its use
•    Gifts to Charities

Separate gifts of up to the annual exclusion amount of $12,000 can be made to the same person by a taxpayer and spouse without making a taxable gift. Also, with the consent of the spouse, a gift can be made up to $24,000 to a person while utilizing both spouses annual gift tax exclusion. This mechanism is known as gift splitting, and the consent is indicated on the gift tax return.

On February 13, 2008, President Bush signed into law the Economic Stimulus Act of 2008. Starting in May 2008, the IRS will be begin sending out rebates by mail or by direct deposit to more than 130 million taxpayers. These payments will go out through the late spring and summer. The majority of people receiving a payment will only need to file a 2007 tax return as they normally would. The IRS will then do all the rest, including determining eligibility and payment amounts.
The amount of rebate will generally equal to the amount of tax liability on the tax return, with a maximum amount of $1,200 for married taxpayers filing jointly ($600 for single filers). These rebates will come in addition to any regular tax refund. Also taxpayers who qualify for a payment will receive an additional $300 for each child who qualifies for a child tax credit.
Individuals earning too little to pay taxes but earn at least $3,000 are also eligible to receive $600 for married taxpayers filing jointly ($300 for single filers).
The rebate is reduced by 5% of adjusted gross income exceeding $150,000 for married taxpayers filing jointly ($75,000 for single filers). So for married taxpayers filing jointly without children, the maximum rebate is fully phased out at $174,000 ($87,000 for single filers). Also, the stimulus act does not apply to nonresident aliens, individuals who could be claimed as dependents, individuals who do not have a valid social security number, and estates and trusts.
The two types of federal tax credits available related to qualified education expenses are the Hope Credit and the Lifetime Learning Credit. These credits can be claimed on behalf of the taxpayer, the spouse or a dependent for which the taxpayer claimed an exemption. To qualify for the education credits, the student must attend an eligible educational institution and modified adjusted gross income (MAGI) must be less than $114,000 for married filing jointly ($57,000 for single). Taxpayers filing married filing separately are not eligible to claim these credits. Also, both credits cannot be claimed for a student in the same year.
The maximum annual Hope credit that can be claimed is $1,650 for each eligible student. The Hope credit equals 100% of the first $1,100 and 50% of the next $1,100 of qualified expenses. The credit is allowed for only the first two years of college and the student must be enrolled in at least half of a full-time load in a degree.
The maximum annual Lifetime Learning credit that can be claimed is $2,000, regardless of the number of students claiming the credit. The Lifetime Learning credit equals to 20% of qualified expenses, up to $10,000. This credit can be claimed for any number of years and the number of hours a student is enrolled is not a factor.
A tuition and fees deduction of up to $4,000 for qualified education expenses is also available which may be more beneficial than the education credits. To claim the deduction, the MAGI for married filing jointly must be less than $160,000 ($80,000 for single). Taxpayers filing married filing separately are also not eligible to claim the deduction. Also, an education credit and a deduction cannot be claimed for a student in the same year.
Taxpayers have the option to receive their tax refunds by a paper check through the mail or by direct deposit into their bank accounts. However, taxpayers who choose to have their tax refund direct deposited into their bank account will receive a quicker refund. Taxpayers who elect to electronically file and have their tax refunds direct deposited will receive their refunds the quickest.
Starting in 2007, taxpayer can also have their tax refund directly deposited into multiple bank accounts. With this new option, taxpayers can divide refunds among as many as three checking or saving accounts and three different U.S. financial institutions. In order to select this option, IRS Form 8888, Direct Deposit of Refund to More Than One Account needs to be completed. This option is available to taxpayers who also paper file their returns.
The filing due date for S corporation and partnership tax returns with 2007 calendar year end (December 31, 2007) is March 17, 2008 and April, 15 2008, respectively. Taxpayers must either file their tax return or an extension by the due date to prevent a late filing penalty. The due date for S corporations is generally the 15th day of the third month and, for partnerships, the 15th day of the fourth month, after the year-end. However, since March 15, 2008 falls on a Saturday, corporate filers will have until Monday, March 17, 2008 to file their returns.
The Mortgage Relief Act of 2007 which was signed into law on December 20, 2007 has made some modifications related to the late filing penalty for partnerships and S corporations. For partnerships, the Act extends the period for calculating the monthly failure to file penalty from 5 to 12 months. Also, the penalty amount has increased from $50 to $85 per partner. For S corporations, the Act imposes a failure to file penalty equal to $85 per shareholder for each month in which the failure to file continues, up to a maximum of 12 months. Also, this is imposed both for a failure to timely file the tax return as well as on a failure to provide required information on the return. The enactment for these late filing penalties is effective for tax returns that are required to be filed after December 31, 2007.