Starting a home business can be a little bit confusing, if you don’t know where to start, what kind of business fits into it. If your house is too big you can start a home business to give you big tax breaks.

Here are the things you should remember when starting a home business:

•    Log your Business Records – It is not the end of the world if you’re being audited. But if you are being audited and don’t have the records that can support your deductions now you are totally pissed off. To avoid this kind of situation, you can make daily records of your home business activities like buying paper for your printer, mileage, phone calls, payments received by your home business and other expenses just make sure you write it down and always attach the hardcopy of your receipts.

•    Workspace Write-Off – Writing off your home office is surely attractive especially if the line of business you have is neatly confined on a dedicated room. You are still allowed to write off the part of a shared room, but the space is calculated as a percentage of the whole house or an apartment area. The percentage is applied to all related expenses, including, utilities, insurance, rent, mortgage payment and so on.

•    Updating your Equipments – the equipments are 100% deductibles like office furniture, software, computers, and other usable equipments. But, the purchases must be primary used, necessary or useful in business.

•    For Retirement and Being Healthy – If you are working for your home business only, you'll need to pay the employer’s share of Social Security and health insurance. However, you're allowed to deduct half of the amount in social security and total premiums for you and any other employees.

•    Phone Calls – If it’s necessary or part of the business to call your clients, you can get a second phone line or a business cell phone because these phone lines are 100% deductibles. In case you seldom talk to your client, you can still make a write off of those costs by marking the dates, times and reasons for calls and then encircle all the items on your regular phone bills to deduct it at tax time.

•    Entertaining the Client – Hanging out with a client is also deductible. Having dinner or some entertainment together with them is acceptable for you.

Maximize your deductions as you can, especially in mileage just don’t forget to collect all the receipts because this are the proof in case you file your returns.