On April 15, 2000, it will be too late to do anything about your 1999 taxes. But if you move fast, there’s still time to limit Uncle Sam’s incursion into your promising new pocketbook.

Although this may seem overly conservative to someone just starting a career, your first order of business should be to maximize your contribution to your retirement plan. Take full advantage of "tax-deferred compounding." You defer paying taxes not only on the contributions you make, but also on the earnings you receive on those contributions. Concurrently, the earnings also compound.

If you contribute the highest amount allowed, it likely will be your largest single tax deduction. In the years ahead, you can expect to enter ever-higher income tax brackets. Simply deferring tax payments until you retire should lower those high-bracket taxes and put you into a lower tax bracket when the time comes to settle with Uncle Sam at retirement.

Even if it seems to hurt, make the largest allowable contribution every year, from the start, to your retirement plan. Your income taxes are minimized and, at the same time, your retirement nest egg is maximized.

Most new ophthalmologists are employees of a professional practice entity owned by senior ophthalmologists who’ve hired them. In that context, your retirement plan options will probably be limited to your employer’s qualified retirement plan or 401(k) plan. If your employer doesn’t have a retirement plan or 401(k) plan, then your options are limited to making a contribution to a regular (deductible) Individual Retirement Account (IRA), or a "Roth" (non-deductible) IRA.

You can make contributions to either type of IRA for the previous year right up until your filing date. But making contributions as early in the tax year as possible should be your goal, because this will allow you to take full advantage of tax-deferred compounding of your investment.

Each of these plans works a bit differently from the others. For example, consider that the Roth IRA allows both you and your spouse (working or not) to contribute up to $2,000 a year. You can’t deduct these contributions from your income taxes, but you’ll be able to withdraw any amounts you’ve accumulated in the plans after you reach the age of 59 1/2 (and under certain other circumstances) tax free, provided you’ve had the Roth IRA for at least 5 years at that time.

It’s preferable, tax-wise, to have your employer pay or reimburse you for any business-related expenses you have, such as the business-related use of your personal car, conference costs, dues, journal costs, and similar expenses. This is because, as I’ll discuss in a moment, your ability to fully deduct those items from your personal income tax Form 1040 is limited. And deducting them on Form 1040 may raise a "red flag" with the IRS.

Consider this pointer on car expenses. The IRS lets you deduct for mileage and out-of-pocket expenses, such as tolls and parking, when you use your personal car for business and your employer doesn’t reimburse you. You may claim the standard mileage rate, which was 32.5 cents per business mile in 1998 (the 1999 rate was not announced as of this writing).

If you use your car primarily (at least 50% of the mileage) for business rather than personal travel, you can claim a proportionate amount of your actual costs and "accelerated depreciation," which results in larger deductions.

You can claim any other business expenses that your practice doesn’t cover, such as travel or entertainment and continuing medical education costs. You can obtain a tax benefit by deducting these miscellaneous expenses, but only if they add up to at least 2% of your adjusted gross income (AGI) and your employer doesn’t pay for them.

You may be able to pay for some items in advance to make sure that your expenses meet the minimum of 2% of AGI. Consider costs associated with your professional dues, journal subscriptions (extend them by a year and pay now) and even "personal" items, such as the fees for tax preparation help and year 2000 charity donations that you make before Dec. 31.

If you take out a loan, borrow against the equity in your home, if you own one. You can deduct the interest (up to $100,000 if you and your spouse are filing jointly) on a home equity loan, but not a consumer loan.

If you decide to support a charity, consider donating appreciated assets, such as stocks, bonds or mutual fund shares. Donating these assets before they pay dividends means you won’t owe taxes on the distributions. If you’ve held these assets for at least 12 months, you’ll also avoid capital gains taxes. You may also donate property and deduct the market value.

Remember to claim all of your dependents, not only children. If you’re providing more than 50% of the support a relative is receiving, you’re entitled to an exemption.

No one outside of the IRS knows who is going to be audited, or when. But keeping precise, complete records is an excellent hedge against that possibility. Save all of your receipts and records that deal with income and expenses.

Keeping excellent records will help you report your income correctly and support and prove your entitlement to deductions. This is much preferable to having the IRS discover problems years later, when restitution, interest, and penalties (civil and possibly criminal) are invoked.

Stashing your invaluable income and expense records in an old shoe box is entirely inadequate. Instead, keep these in a safe place, in an organized way. Consider using a locked, fire-retarding strong box at home, or renting a safe-deposit box.

Hire a tax adviser – usually this means an accountant, but sometimes an attorney is equally good – and have him look after your taxes with you (or for you).

As a new ophthalmologist, you’re extremely busy and quite unlikely to have the time (or, for that matter, the inclination or training) to function as your own tax expert to the extent necessary to truly optimize your tax situation.

Further, you may not be aware of numerous "tricks of the trade" that tax professionals understand. Consider that the tax law permits the filing of certain types of income and expenses in different ways. The income and expenses remain the same, but, in many cases, choosing the right reporting method can save you substantial amounts of money.

If you don’t have a tax adviser, ask your fellow ophthalmologists for contacts. Check references and Better Business Bureau reports, as well as rates. Make an appointment. Find out exactly what information your adviser will need. Gather the necessary information and become familiar with it.

Be sure to complete any tax organizers, questionnaires and other forms your tax adviser may ask you to complete. Every fact, every detail you provide, could save you substantial amounts of money. Keep copies in your strong box.

Work with your tax adviser. Volunteer information that may be useful about any aspect of your life that has involved financial change. Ask questions about what may and may not be taxed, and at what rate. Discuss your options. Help your tax adviser help you.

Consider the old bromide that someone who acts as his own attorney has a fool for a client. The same principle applies to

your tax return preparation. Only someone who is well versed in the tax laws and familiar with your unique tax situation can

accurately and adequately advise you about what you need to do to optimize your tax situation.

However, some ophthalmologists insist on preparing their own tax returns, many of them at the last minute. If you’re one of them, you can still get tax help, at any time of the day or night, in your home. The IRS has an extensive website, at http://www.irs.ustreas.gov. The site has interactive sections, hundreds of forms to download, a frequently-asked-questions section, lists of tax-preparation software you may acquire and a number of filing options, including an electronic filing system. You can even e-mail questions to the IRS.

If you file your tax return late, you may have to pay interest and a penalty. If it looks as if this might happen, consider applying for an automatic 4-month extension by filing the IRS’s Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, by April 15.

It’s important to understand that a filing extension doesn’t extend your deadline for paying your taxes. The IRS will expect you to make an accurate estimate of your 1999 taxes and submit your payment along with Form 4868.

If you end up owing more than you’ve estimated, or if you make a partial payment (by arrangement with the IRS), you’ll be expected to pay the difference later, with interest. If your estimate is substantially below the amount you’re actually required to pay, the IRS may also tack on a penalty.

Take the broadest possible approach to your taxes within legal parameters. Claim all the deductions and credits you can. Remember that even events from previous years can have an effect on this year’s taxes.

Try to take full advantage of all of the legal deductions allowed by law. Keep accurate, detailed records, and secure them in a safe place. Remember that the IRS’s rules are complex and that they overlap. Tax laws also change; be sure to use the rules and rates that apply now.

Finally, work with your tax advisers. They know and understand all of the lax laws and how to apply them. Investing in their knowledge, experience, and talent now will pay big dividends later. On the other hand, you also need to remain involved in the process. Even the best adviser can’t possibly know everything about your finances.

Every new ophthalmologist needs to establish a customized, detail-oriented tax strategy that will pay off financially and keep the IRS at bay. Now is the time to optimize your 1999 tax situation and start planning for your future.