DALLAS -- Year-end tax planning always involves a degree of uncertainty, but this year it's more pronounced, given the upcoming 2008 election and political squabbles surrounding current tax legislation.

"We do not know if Congress is going to give alternative minimum tax relief for millions of taxpayers," said Ken Sibley, a certified public accountant and chairman of the Dallas CPA Society. Without the legislation, he said, "There will be millions who are going to be surprised by the AMT in 2007."

The House of Representatives passed legislation Nov. 9 to shield 20 million middle-class taxpayers from the AMT. Final congressional approval could be slowed by differences with the Senate over how to pay for it.

The $77.8 billion package also would extend several dozen targeted tax breaks due to expire, providing relief for education costs, charitable donations and the sales tax deduction.

It also would increase eligibility for the refundable child tax credit.

But the core of the package is a one-year fix for the alternative minimum tax that includes raising the AMT exemption amount to $66,250 for taxpayers filing joint returns and $44,350 for single taxpayers.

The AMT is a parallel income tax designed to prevent very wealthy people from avoiding taxes altogether, but because it wasn't indexed to inflation, it's been biting deeper into the middle class and, without the legislation, would be expected to hit more than 23 million families this year.

"Many of those taxpayers could also be subject to underpayment-of-estimated-tax penalties," said Mark Luscombe, principal federal tax analyst at CCH, which publishes information for tax professionals.

The AMT is most likely to hit taxpayers who make between $100,000 and $500,000 and have big deductions, such as those with many dependents and residents of high-tax states. State and local taxes aren't deductible under the AMT.

"The longer you wait on the AMT, the worse it gets," said Rep. Sam Johnson, R-Texas, a member of the House Ways and Means Committee.

He co-wrote a provision in the tax bill that would help taxpayers paying the AMT because of "phantom gains" earned on incentive stock options when the tech bubble burst.

A phantom gain occurs when a gain on an investment is offset by a loss in the same investment, which usually comes from an income tax provision, so there's no true return.

Congress needs to act soon or risk throwing the 2007 tax-filing season into confusion and disarray, potentially delaying tax refunds, Internal Revenue Service officials said.

"This must-pass legislation provides tax relief to millions of families who, through no fault of their own, would be forced to pay higher taxes under the AMT," said Rep. Charles Rangel, D-N.Y., chairman of the Ways and Means Committee.

With these uncertainties in mind, here are some year-end tax tips:

Avoid the AMT.

The AMT flips the traditional tax advice on its head. Normally, you're advised to postpone income to next year and accelerate deductions to this year.

For example, to get a tax deduction early, you can pay your property taxes in December instead of January.

But if you think you're at risk of being hit by the AMT this year, the advice is the opposite: Consider delaying paying your property taxes until next year, when they would be deductible.

And you'd want to accelerate your earned income, because that decreases the likelihood that you will be subject to the alternative minimum tax.

But if you think you're more likely to be hit by the AMT next year, then defer income to next year and accelerate certain deductions into this year.

For best results, find a psychic tax adviser whose crystal ball can tell what Congress is going to do.

Max out retirement savings.

A tried-and-true year-end tax strategy is to max out your tax-deferred 401(k) or 403(b) retirement plan.

That not only gives you a head start on retirement saving; it also saves you money on your tax bill.

Since your contributions are made with pretax dollars, your current taxable income is lowered.

For this year, you can contribute up to $15,500, or up to $20,500 if you're at least age 50 by the end of the year.

Give to charity.

The IRS is clamping down on what it sees as abuses in the realm of charitable contributions.

New for this year is a requirement that all monetary donations must be documented with a receipt, a bank record such as a canceled check, or written acknowledgement.

Also new this year is a requirement that donated clothing and household items be in good used condition or better to qualify for a deduction.

If you're planning to clean out your closet and donate old clothes to a charity, you may deduct only the fair market value for the donated goods. That's the amount that someone would pay for such items in a thrift shop.

You also can get a deduction for donating property such as stock, mutual funds, artwork and antiques.

Beware the kiddie tax.

Congress has tightened the screws on the "kiddie tax."

The rules are aimed at thwarting wealthy parents who make gifts to a child to take advantage of a lower tax rate on children's investment income.

"It taxes the child as though the income were earned by the parent, so the amount of tax due would be higher," said Bob D. Scharin, RIA senior tax analyst at Thomson Tax & Accounting.

The tax currently applies to children up to 17 years old. Starting next year, the kiddie tax rules expand to apply to children 18 years old, and ages 19 to 23 if they're full-time students and the child's earned income doesn't exceed half of his or her support.

Sales tax deduction.

The sales tax deduction is in place for the current tax year, but its fate is unknown for next year.

Those who live in states where there is no income tax can use the IRS' standard tables to figure out how much to deduct. But they also can tack on big-ticket items such as cars and boats.

Whether Congress extends the break or not, if you're thinking of buying a car, consider accelerating the purchase to get the sales tax deduction for this year's taxes. You have to itemize to get this deduction.

Teachers, claim your break.

Elementary and secondary schoolteachers can deduct up to $250 of the cost of books, supplies, computer equipment and software they buy for the classroom.

You don't need to itemize to take this deduction.

The deduction is another one of the tax benefits that Congress is considering extending for another year.