To be eligible for business related deductions, you must use that part of your home claimed exclusively and regularly as the principal location of your business. You can calculate what percentage of the house is used for business, either by number of rooms or by area in square footage. If you use one of five rooms for your business, the business portion is 20 percent. If you run your business out of a room that's 10 by 12 feet, and the total area of your home is 1,200 square feet, the business space factor is 10 percent. If you're a renter, you can deduct the part of your rent, which is attributable to the business share of your house or apartment.

You can write off the transportation expense of getting to and from your clients' places of business and other business related transportation costs. You will want to record the odometer mileage of your car before and after your trip to determine the number of miles traveled. "detailed records are critical"

The first phone line into your home is considered by the IRS as a personal expense. Additional phone lines for business use, are tax deductible. Internet service provider fees are deductible as a percentage of the total usage for business.
If you take a client out to lunch and talk about business, it is tax deductible. "make sure to keep your receipts"

Many home based businesses let themselves get cheated by not taking deductions they are legally entitled to for fear of being audited. As long as you stay within the IRS guidelines and keep receipts, you are safe to take the deductions you are legally entitled to. The Home Office Deduction in particular is a deduction that many have wrongly assumed makes them a target for an IRS audit.

If you have any questions go to the IRS website at www.irs.gov