Deductions

On the positive side, you may have significant deductions. Your list might include all or partial cost for the following items. Some items may need to be gradually deducted over time, known as depreciation.

• Association & organization dues
• Bank fees related to your business
• Computer software & updates
• Messenger service
• Office equipment, furniture, supplies
• Office utilities
• Phone expenses
• Postage & shipping costs
• Subscriptions to business related periodicals
• Rent or mortgage interest for your dedicated office space
• Salaries for any employees
• Transportation expenses when visiting clients
• Web site expenses (hosting, domain name renewal, etc.)

Note: For business purchases under $75 you do not need a receipt as proof. However, you do need a written record (or computerized spread sheet) of daily petty cash purchases. And, it's a good idea to keep all receipts in envelopes - one for each month.

For 2009, consider using a service such as Shoebox (www.shoebox.com) which scans receipts you mail to the company and then organizes for tax purposes. There's a free trial offering and afterwards the service charges $10 to $50 per month, depending upon how many receipts are involved.

Two more points to keep in mind:

(1) Your IRA or SEP contributions for 2008 are deductible.

(2) Your first quarterly estimated tax payment for 2009 is due on the 15th.

More info: www.IRS.gov