Mark your calendars — Saturday, April 19, 2003, marks national Tax Freedom Day*

While this day doesn't involve trees, eggs, or fireworks, you should be just as concerned about it. In 2003, almost one-third of our time (30%) will be spent working for the government.

According to an annual report issued by the Tax Foundation, a nonprofit, nonpartisan research organization, Americans have worked the first 109 days of 2003, from January 1 to April 19, just to pay taxes. In theory, this means that on April 19 your job began to produce spendable income and your taxable investments became profitable.

The Tax Foundation took its analysis one step further and broke down the tax implications for each state (and the District of Columbia). This year, Connecticut is the unlucky winner, bearing the nation's largest tax burden with a Tax Freedom Day of May 9. On the opposite end of this spectrum is Alaska, which celebrated the earliest Tax Freedom Day on March 30.

How can you reduce the time it takes to reach Tax Freedom Day next year? Ask yourself three simple questions related to your financial situation in 2001:

If you earned taxable interest on investments that you expect to hold for the long term, it's too bad you had to pay current taxes on it. With taxable investments, the reality is that you don't always liquidate your holdings to pay taxes. In all likelihood, you pay the tax out of current income or out of withholding from other income sources. This technique reduces your spendable income today, and may reduce it in the future. Fortunately, there are sensible strategies that will help you maximize long-term returns while potentially reducing your tax bill.

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*Excerpted from the Tax Foundation Special Report No. 122, "America Celebrates Tax Freedom Day."

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