Bone up on rules, then start planning

Want to lose less to the IRS? Keeping good records is the key to mapping out strategies that you can use year after year to trim taxes. But organizing that ever-growing accumulation of records in your desk drawers, closets and other storage spaces is just the first step for effective tax planning.

Educating yourself on the current tax opportunities and pitfalls can be an important second step. Ideally, you should be equipped to weigh the tax consequences before you make decisions on whether to invest, borrow or spend.

In these increasingly tough times, it is more vital than ever that you assume greater responsibility for your financial future. You ought not to rely exclusively on paid advisers to keep on top of tax-law changes or other legislation that might make it necessary to revise your plans.

At the very least, you should be knowledgeable enough to raise good questions and evaluate answers when you deal with a professional.

On a personal note, JFK was president when I first passed a bar exam. Eight presidents later, I still am constantly contacted by individuals seeking to disentangle themselves from problems created by their blind reliance on flawed advice from highly paid professionals. That is why I recommend that you sign up for low-cost adult education courses on taxes, investing and other aspects of personal finance.

You can pick from among an array of continuing-education courses tailored to your interest that are available at high schools, community colleges and the like and are typically taught by lawyers, CPAs and financial planners - individuals with hands-on experience .

What is particularly advantageous is that the courses make it possible for you to pick the brains of qualified instructors at a fraction of what it would otherwise cost to meet them on a one-to-one basis.

An example: In my near-New-York-City neck of the woods, the going hourly rate for tax lawyers commonly is several hundred dollars and up, whereas students generally pay about $40 at the adult ed places that offer my two-hour sessions on narrowly focused topics such as how to take maximum advantage of changed rules for home sales.

Another decided advantage is that you and your fellow students get to ask questions about significant events in your financial lives. Some of the queries regularly fielded by me and my fellow instructors: the tax and other legal consequences of getting hitched or unhitched; when and how much to remove from traditional IRAs or other tax-deferred retirement plans; whether to make lifetime gifts of money and other kinds of property to family members or to leave the assets to them; and the tax-right way for free-lancers and other self-employed individuals to open, operate or close their business ventures.

Also, you learn money-saving techniques that you can apply yourself or, should you decide to seek professional help, test out on your advisers. And, conceivably, those advisers might turn out to be your instructors, whom you´ve had an excellent chance to evaluate.

Are there some kinds of courses that should be shunned? Unquestionably, in my experience, when it comes to no-charge seminars sponsored by brokerage houses, insurance companies, etc.

Far too often, these outfits use the talks mainly as marketing tools to promote (1) themselves, (2) dubious investment vehicles and other products designed to generate lucrative commissions for themselves and dismal returns for their clients or (3) all of the above.

• Send comments and obtain information from Julian Block at www.julianblocktaxexpert.com.