WASHINGTON (Map, News) - With a new year under way, it is not too early for businesses and individual taxpayers to start working toward paying fewer taxes in 2008.

The easiest — and biggest — tax reducers are as simple as proper bookkeeping and accurate accounting, according to tax advisers.

Businesses need to make sure their books are properly set up and keep accurate records, a simple yet often overlooked detail, said Paul G. Stappas, a consultant for small and medium-sized businesses and the founder of Bookkeeping Administration Management, a company in Neshanic Station, N.J., that provides bookkeeping services.

The biggest tax mistake for small-business owners is “probably failure to keep accurate records,” said Thomas P. Ochsenschlager in a discussion forum hosted by the U.S. Small Business Administration. Ochsenschlager is the vice president of taxation for the American Institute of Certified Public Accountants.

For example, if a business owner receives a deposit for a service that hasn’t been provided, it’s not really a sale that requires sales tax payment yet and should be counted as a liability, Stappas said.

Businesses can also benefit by taking advantage of certain tax incentives.

For example, employees might prefer benefits such as education assistance, transit cards and dependent care to higher salaries — all of which are tax-deductible to the employer, Ochsenschlager said.

For individual taxpayers, a few strategies can minimize taxable income and maximize deductions for 2008. If available, individuals can defer part of their salaries until a later date, reducing their income for 2008. Those working on commission can delay collecting payments toward the end of 2008 until the beginning of 2009.

Homeowners also can prepay some items, such as mortgage interest for the first month of 2009 to receive a bigger tax deduction in 2008, Stappas said.

For charitable deductions, taxpayers now must save documents showing proof of all donations, even small ones or cash gifts.

“Now you cannot rely on cash giving,” he said.

Clothing donations are difficult to deduct, unless the donor has the value of the clothes estimated. Consignment shops and some charities will provide appraisals, Stappas said.

wblake@dcexaminer.com

Comments from Examiner Readers

8:22 PM MST on Tue., Apr. 15, 2008 re: "Post offices stay open late for tax procrastinators"

Examiner Reader said:
What post offices are open today later than 7:30 p.m.?

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5:30 PM MST on Tue., Apr. 15, 2008 re: "Post offices stay open late for tax procrastinators"

Gizmo said:
It's pay day in the congress and Ted Kennedy is waiting for my check, it's his turn to buy a round at the Senate Bar.

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4:39 AM MST on Mon., Mar. 31, 2008 re: "Tax pros: Don�t forget deductions for education, savings, contributions"

Examiner Reader said:
This article should have been written in January... Better late than never...

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5:22 AM MST on Tue., Oct. 30, 2007 re: "�No new taxes:� Md. groups rally against O�Malley�s tax hike plan"

Martin O'Malley said:
Stop criticizing me, you'd do the same thing if you were in my position. I'm the governor, I have the right to have more power and control over money. And the best way to do that is take it from the rich. They have the most of it, and besides, they don't protest and complain because they're too busy working.

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5:14 AM MST on Tue., Oct. 30, 2007 re: "Republicans say poll a sneaky way to increase taxes"

Examiner Reader said:
The poll was done by "Alliance for Tax Fairness, a coalition of liberal advocacy groups". I'm sure that wasn't biased at all... What really cracks me up are these far left groups that throw "Progressive" in their title. Progressive to who/what, other than your socialist agenda? Is huge government "progress"? I don't think so, anyway.

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4:42 AM MST on Tue., Oct. 30, 2007 re: "�No new taxes:� Md. groups rally against O�Malley�s tax hike plan"

reader said:
I think the politicians should stand and say to O'Malley, make the cuts and see where that lying, sack of crap will lay the blame then. Oh I forgot he can always blame Bob Ehrlich, even for the BGE lies he told us.

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4:12 AM MST on Tue., Oct. 30, 2007 re: "�No new taxes:� Md. groups rally against O�Malley�s tax hike plan"

VJC College Republican said:
If Thomas Jefferson thought taxation without representation was bad, he should see it with representation!

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4:06 AM MST on Tue., Oct. 30, 2007 re: "�No new taxes:� Md. groups rally against O�Malley�s tax hike plan"

Examiner Reader said:
Thanks Baltimore City and Prince Georges county for electing this tax and spend Democtat. You deserve all the taxes this wimp can impose

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3:05 AM MST on Tue., Oct. 30, 2007 re: "�No new taxes:� Md. groups rally against O�Malley�s tax hike plan"

Sven said:
Makes no never mind. O'Malley has got them where he wants them. Don't give him his tax increases and he will cut the funds to your county, teachers retirement, green programs and anything else to blackmail the legislators. M.O. WINS!

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12:24 PM MST on Tue., Aug. 7, 2007 re: "Republicans say poll a sneaky way to increase taxes"

Examiner Reader said:
Tax fairness� lol. How is it fair the I might be taxed more just because I happen to be successful? Am I using more State resources then someone who is less successful? I've got two kids in college but I don't qualify for any state aid on tuition because I've committed a sin against liberal sensibilities by making to much money. A lower income citizens kid gets the State tuition aid my kids are denied how�s that for fair. The 4% state tax on a $200,000 salary equates to a bigger contribution to the state coffers the 4% with held from a $35,000 salary so don't talk to me about fair taxation.

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4:40 PM MST on Fri., Aug. 3, 2007 re: "Republicans say poll a sneaky way to increase taxes"

Examiner Reader said:
Simple solutions to taxes, No Taxes except on purchases.... The rich would then pay and the poor would save. No employment tax!!

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2:28 PM MST on Fri., Aug. 3, 2007 re: "Republicans say poll a sneaky way to increase taxes"

Examiner Reader said:
Why is it that the folks who conduct these polls never speak with anybody I know?

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10:43 AM MST on Mon., Jun. 18, 2007 re: "Thousands of city properties on the market in tax auction"

Examiner Reader said:
I've searched everywhere for the list, including the Times for the list of properties. It has not yet made it to the OTR website. Anyone know where you can find this other than the original newspaper ad?

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