If you're an independent contractor, it's imperative that you understand the tax rules involved. For tax purposes, independent contractors are treated as if they are running their own businesses. This makes them eligible for many tax benefits that are limited or not available to employees.

Federal and state taxes are not withheld on behalf of independent contractors. Instead, independent contractors pay estimated taxes directly to the IRS four times a year. Because the ordinary and necessary costs of operating a business are tax deductible, independent contractors can complete Schedule C to deduct the full cost of most business expenses.

As an independent contractor, keeping accurate records of income and expenses is critical. Thorough records can facilitate the task of preparing, a complete and accurate tax return. They also serve to substantiate your deductions in the event of an IRS audit.

Listed below are some common deductions available to independent contractors. But each contractor's business situation is unique, so it's advisable to consult with a tax professional to maximize your deductions and minimize your tax liability.

Home office expenses

The home office deduction is available to those who use an area in their home regularly and exclusively for business purposes. In addition to regular and exclusive use, you must use your home as your principal place of business. That means you use your home office as a place to meet clients or conduct administrative or management activities.

Health insurance premium

For 2002 you can deduct up to 70 percent of the health insurance premiums you pay for yourself, your spouse and dependents to arrive at your adjusted gross income (AGI). The remaining portion of health insurance costs may be added to your itemized medical expenses, an addition which could help you reach the necessary threshold of 7.5 percent of your AGI. If your home is your principal place of business, you can generally deduct the cost of traveling from your home to any business destination. If your regular office is outside of your home, you may not deduct the cost of commuting to or from that office, but you may be able to deduct the cost of traveling to see clients.

Professional fees

Fees you pay to lawyers, tax professionals and consultants concerning issues related to your status as an independent contractor or to your work in general are deductible in the year they are incurred.

Dues & publications

Newspapers, journals and books related to your work are deductible. This includes industry-specific as well as general business management publications. You can also deduct dues to professional associations and organizations.

Retirement Accounts

One of the biggest breaks available to independent contractors is the ability to set up a tax-advantaged retirement plan. Earnings aren't taxed until you start drawing on the account, so you get a current deduction for your contribution in addition to tax-deferred growth.

Equipment costs

Normally you can t take a business deduction for the entire cost of a capital asset in the year you place it in service. However, under Section 179 of the tax code, you can deduct up to $24,000 in 2002 for the cost of work-related equipment. This provision provides you with an immediate deduction, rather than one spread out over a period of years.

Business meals & entertainment

If you entertain current or prospective clients, you may be eligible to deduct 50 percent of the expense as long as it is related to your business.Just be sure to record the date, amount, location, business purpose and names of the individuals involved. The IRS requires documentary evidence to support expenditures of $75 or more. But to be on the safe side, collect receipts every time you incur an expense for business meals or entertainment.

Other deductions

Pens, paper, folders and the hundreds of other little items you use to keep your office running can be deducted as office supplies. If you install a separate telephone line for your business, that's deductible too. Parking fees and tolls related to your business activities are also deductible.

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You've tried all of the time management techniques offered by the experts. You've attended seminars about getting organized, setting goals and working through your
"to-do" list. Yet, the pace of your work life is still more than you can handle.

Here's a new approach, the mental approach to time management that will actually help you feel in control and restore enjoyment to your daily routines.

Great achievers plan, control and use their precious time wisely so they can reach even higher on the success ladder. You can adopt the same principles to reclaim your time and become more productive. Here's how:

If you're always on the go, your self-awareness will be at its lowest. Take time at the start and end of each day to assess your time style from the biggest picture possible, even from the perspective of the course of weeks and months and the year.

To gain a feeling of controlling your time, begin by going inward. Notice which tasks stress you the most. Approach those tasks with a calmer, more focused resolve. Vow that they will not upset you. Be determined that you will not rush or hurry through your day.

When you allow things to slip off your task list, even that act is a decision. Approach everything you do as consciously and purposefully as possible by taking time to review your tasks from a strategic stance often. Refuse to get mired in the day-to-day minutiae.

Achievers don't add more tasks to their to-do list as openings come up. They maintain breathing spaces so they can recover and operate optimally more often. Overcome the feelings of guilt or laziness if your calendar is not crammed full. Create healthy openings in your schedule.

There is wisdom in being a persistent, determined achiever. But when you meet strong resistance to completing a task, it may be wiser to let it go or to take a different approach. Recognize when you're spinning your wheels. Then change course.

Instead of rushing to complete a particular task, slow down and enjoy it fully. Use it to refresh yourself and to take a break from more stressful tasks. Achievers know that sometimes you gain speed by slowing down. Strive for quality, instead of quantity alone.

Top achievers regularly schedule exercise, food, rest, recreation and other breaks throughout every day. They prioritize these tasks as much as any other. They realize the restorative properties of these stress-buster breaks. By schedulingdown time, you'll propel yourself ahead as well as maintain peak mental and physical levels.

Peak performers take regular mental vacations throughout the day. That action keeps them highly energized and motivated to be productive. Be a smart achiever. Take mental vacations to maintain your balance.

What actions can you take this week to become better at managing your time? Here are some ideas to get you started.

*Increase your awareness about your time-management style.
Ask others how they view your current time control style. Take short breaks in your day and assess how you're
handling your time.

* Make quick, positive changes to your time-management system today.
Eliminate a task from your to-do list right now. Move a few items off of your A list and onto your C list.

* Maintain balance and control by reducing your frenzied work style and replacing it with a live-in-the-moment approach. ~

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Even if you're determined to organize your personal financial life, it's easy to get lost. Don't try to figure out and master all the personal organizers and electronic gadgets that are supposed to make it easier. Meanwhile that stack of unattended paperwork multiplies like dust bunnies behind a desk.

Disorganization and procrastination can be difficult behaviors to reverse, but it's worth the effort. Taking just a few steps can reduce stress and lead you on a path toward financial peace of mind. Here are some expert tips to help you cut through the clutter in your personal financial life:

Stash the paperwork

Each year you can count on receiving a heap of tax-related mail. Shove all that paperwork in the same file folder so it's out of sight, yet easy to find when you're ready to deal with taxes. Don't buy a special file. Don't scan all the documents for systematic filing on your computer. Don't lose sleep debating whether information for the Schedules A and B should be alphabetized under A or B. Just find a manila folder and shove everything into it. You can sort it all out at tax time.

Make non-monthly bills a non-factor

Do certain expenses sneak up and bite you in the budget? Bills for auto insurance, car registration, property taxes and homeowner's insurance has sharp teeth, but they don't need to draw blood. Simply add up anticipated expenses, divide the total by the 12 and deposit that amount in a savings account every month.

Auto pay is the way

You've resisted paying your bills through electronic debit because you like to control what gets paid and when. Strange how that control can lead to frustration when you forget to pay a bill on time. You suffer late fees. Or worse, your forgetfulness results in negative blips on your credit report. Direct payment plans are free, safe and easy to establish. Plus, they eliminate the cost of mailing checks. Mortgage companies, utilities and even credit card companies are eager to help you get started.

Two cards may be better than one

If you have more personal credit cards than you can count, how can you possibly keep track of all the due dates, minimum payments, annual fees and interest rates? Get rid of all your cards except two.

Make one a debit card. It works with ease like a credit card, but the amount you spend is automatically deducted from your checking balance. Only use a second card if you must carry a balance, and don't make new purchases with it. If your credit card debt is too big to consolidate on one card, organizational peace of mind may not be your top financial priority

What to keep and what to toss

For some people, getting organized simply involves dumping paid bills, bank statements and other financial documents in the circular file or running them through the paper shredder. The purging process may have a cleansing effect, but you're certain to throw out records you should have kept. It's safe to toss paid utility bills after one year. Keep monthly bank and other financial statements, including income tax returns, for three years. Store wills, trusts, powers of attorney, birth, marriage and death certificates, adoption and custody papers, investment records, insurance policies, car titles and property deeds in a safe place. It can take months to replace lost originals. Scanning documents into your computer will work for quick reference, but won't make them legally useful. You're still going to need the originals.

Stuff your stuff using "account aggregation"

Account aggregation is an intimidating phrase you may have heard in conversations about getting organized. Basically it's a service that allows you to track an unlimited number of online accounts in one place.

One example of an aggregator is Yodlee.com. IHateFinancialPlanning.com calls its account aggregation tool My Shoebox Online. Data from Web sites is collected, summarized and delivered to your personal account, which you access using just one password. You can track your airline miles, e-mail or cell phone accounts, checking, savings, credit card, brokerage accounts and more. Talk about convenient, secure and private; even the dust bunnies won't be able to invade it.