In order to limit your tax liability, it’s important to learn what kind of business deductions you should be keeping track of. This is a big mistake that many newly minted freelancers and independent contractors make when starting off. The consequence is that they end up paying way more to uncle same than is necessary. You also have the potential of missing out on state and federal tax credits. Tracking business deductions are not as complicated as you think, however. Items such as home office expenses and meals can be included as business expenses.
Nevertheless, it’s important not to go overboard because you then risk the chance of having the IRS audit you. There’s no need to worry about that, however, because this article Daphne Mallory gives you and easy guide on what to include and not include in your business deductions. By the end of it, we’re confident that you will feel that the whole process is a lot more straight forward than it seems.
And while the article doesn’t explicitly mention this, we personally recommend that you hire a tax adviser. It’s the best way to ensure that you’re limiting your tax liability as much as possible without stepping over the line. This information is important to know for yourself, but having a second (professional) eye is a always a good practice.