by Brad Glanville and Bob Fischer

Q. Every year I seem to end up with a shoebox of receipts and things that I haul down to my tax preparer. My New Year's resolution was to avoid this in the future. Do you have some suggestions for how an educator can get organized for taxes?

--NICK K.
St. Paul, MN

Bob: If you have a home computer, a money management program is an absolute must! There are several out there that enable you both to balance your checkbook and to keep track of your cash expenditures. You can also tag every tax-related expenditure by placing it in a tax-related category such as charitable contributions, employment-related expenses and so forth. At year's end, you can print out a complete list of every taxable expenditure plus a total with a couple of mouse clicks. If you really want to get sophisticated, you can even export the data right into a tax-preparation program. One drawback to the computer program is that you will have to itemize your monthly credit card charges and enter those into the computer program, too.

Brad: If you don't like the computer concept, then you really ought to have your shoebox compartmentalized so that it has all the main sections found on Schedule A, Itemized Deductions. That way, as you pay your monthly bills, you can just put the receipts into the proper section and simply add them up category by category at the end of the year.

Bob: Some educators obtain a credit card to use solely for professional expenses. This will, at least, keep expenses organized month by month; it also makes it less likely that you will overlook a professional expense. This is a very good idea, especially when traveling for professional reasons.

Brad: If you want a simple system to track your deductible auto mileage, put a small notepad in the glove compartment of each car you own. Make some vertical columns and label them as follows: destination, start odometer, finish odometer, business, charity, medical. It takes about 10 seconds to jot destination and starting odometer reading before you leave. At the end of your trip, it takes only a few seconds more to jot down the finish odometer reading. The final step is to subtract the start odometer reading from the finish odometer reading and put the total mileage driven into the appropriate column. This gives you the contemporaneous record the IRS requires for such mileage and makes it impossible to overlook the deductions. The column totals will give you your annual mileage by deductible category. Professional mileage in 2000 will be 32 cents per mile, while charity is 14 cents and medical mileage is 10 cents per mile.

Bob: The best part about all of this is that it helps you focus on your tax-related expenditures and helps you do tax planning. Like we always say, tax planning saves much more money than clever tax preparation.