January, 2008

Dear Clients,

As 2008 begins, we at Portney & Company, Certified Public Accountants and Business Consultants and Portney Consulting, LLC and Portney Management Group, LLC send you our best wishes for a New Year filled with good health, new hope, and new beginnings. May 2008 open up for you more opportunities and lead you onto the path of continued success, happiness and prosperity.

While no one can predict the future, goals are not achieved by chance and we at Portney & Company are continuing to upgrade the services that we offer to help you achieve your financial goals.

Full information about our services can be found on our web sites at www.portney.com. We think you will be pleased with the many useful features and services there, such as our financial calculators, on-line forms and bill payment, timely articles and other user friendly information. Additionally, there are links to various sites with which we have strategic alliances. We encourage you to bookmark www.portney.com for your business and personal financial needs.

As you are aware, tax laws and regulations are in a constant state of change. It is sometimes amazing to consider the burden that the federal government places on individuals and businesses in the area of taxation. The rules are often exceedingly complex and are frequently modified which can add to the complexity of your income tax filing requirements. As such, it is more important than ever to have an on-going relationship with your tax advisors at Portney & Company. We are prepared to review your situation and offer practical and effective solutions.

A number of changes were made to the tax law with the signing of the TAX INCREASE PREVENTION ACT of 2007 (TIPA) on December 27, 2007. As such, the recent changes in the law mean that some of the necessary form changes will cause the IRS a processing delay. This is especially true for those taxpayers that are potentially affected by the late enactment of the Alternative Minimum Tax (AMT) patch. AMT is a parallel tax calculation that disregards certain deductions and adds certain income. Congress has passed last-minute legislation to provide temporary relief against the alternative minimum tax and make other corrections to the tax laws because it affects so many taxpayers. The IRS has reported that it needs up to ten weeks to update its computer systems after the law changes.

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January, 2008

Some of the most notable changes for impacting the largest groups of taxpayers in the filing of their 2007 returns include the following:

Deductibility of Mortgage Insurance Premiums

Mortgage insurance premiums are now deductible as part of the mortgage interest deduction, but for four years only and expires at the end of 2010. Mortgage insurance provided by the Veterans Administration, the Federal Housing Administration, the Rural Housing Administration, and private mortgage insurance companies all qualify for the deduction

Backup for Charitable Deductions

For claiming a charitable contribution on your 2007 return, receipts are required for all donations, whether of cash or property, and regardless of the amount or value of goods donated. Acceptable records would include canceled checks, a bank or credit card statement showing the name of the charity along with the amount and date of the donation, or a written acknowledgment letter from the charity. All tax preparers are required to ask if you have the above receipts and retain written proof of your answer for five years.

There are many other relevant IRS topics affecting taxpayers today which have been subject to recent legislative, judicial and administrative changes. Our experienced staff has been fully updated on how to deal with the various issues and how they apply to your tax return. Visit our website for full details on the tax changes www.portney.com.

Please call us to schedule your tax appointment, or mail in your information as soon as it becomes available. In order to meet the filing deadline for your 2007 income tax return, your completed tax organizer needs received by our office no later then February 29, 2008. Any information received after that date will require an extension of time be filed for your return.

To help you gather what you need we would like to email you, upon your request, a personalized electronic tax organizer or a traditional paper organizer. See our website, www.portney.com for more details and e-mail us at help@portney.com to receive your organizer. We have greatly improved on this service.

Upon receiving your request, we will send you a password-protected email that you can download to your computer, print, fill out and mail back to us, or you can fill it out directly online to our servers. Of course, W-2 forms, 1099’s, year-end brokerage statements, K-1’s and cancelled estimated tax payment checks will also need to be mailed or scanned and emailed to us Help@portney.com or brought to your appointment.

We truly appreciate the trust and loyalty shown us and wish you and your family a New Year of peace and prosperity.

As always, we have enclosed some tax related quips and cartoons for your enjoyment.

With warm regards,

Jack M. Portney Mary Lou Portney

Jack M. Portney, CPA Mary Lou Portney, CPA

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