(MONEY Magazine) – For all the ill will you might feel toward federal legislators, remember that Congress, collectively, is no different from the rest of us when it comes to personal finance. It tackles money difficulties by picking off smaller problems first and delaying the overwhelming tasks as long as possible.

That's why in 2007, Congress will still be grappling with two major tax issues that have loomed for years: the estate tax and the alternative minimum tax (AMT). The way things stand, the estate tax, which now applies to estates worth more than $2 million, will drop to zero in 2010 and reappear in 2011 for $1-million-plus estates. That calendar is both bizarre and troublesome--think about the incentive dangled before impatient, homicidal heirs in 2010--but Democrats, generally for the estate tax, and Republicans, generally against it, have yet to compromise.

There's more bipartisan support for revising the AMT, since that tax, originally designed to ensure that the wealthy couldn't weasel out of paying taxes, has grown increasingly burdensome on the middle class despite temporary fixes. Unfortunately, reining in the AMT, expected to raise $22 billion in 2006, will require finding substitute tax revenue. So Congress may again adopt only a short-term fix to lighten the AMT's load.

But Congress did tackle some money issues in 2006, and you'll see the effects in 2007. With traditional pension plans in decline, Congress is giving people more options to save for retirement. New rules make it simpler for companies to automatically enroll employees in 401(k)s; the Roth 401(k) has been made permanent, as have IRA and 401(k) catch-up provisions for people 50 and older; and income limits on Roth and deductible IRA contributions will be indexed to inflation.

• SINGLE BEST IDEA Invest your tax refund for retirement--automatically. Starting with your 2006 tax return, you'll be able to directly deposit your refund in an IRA. Yield not to the temptation of spending your refund--just get yield.

The View 2007

Limited AMT relief

Number of people who could owe the tax in 2007: 22 million

SOURCE: Tax Policy Center.