By: Darlene Bishop

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NOTE: Darlene Bishop is NOT a tax specialist or accountant. Seek professional advice before following any suggestions given in this or any other article related to business tax deductions. 

One of the major tax benefits to owning a home business is the variety of deductions you can claim on your income tax return. In no particular order, here are some deductions you should be sure to look for when preparing your taxes or hiring someone to prepare them for you: 

Computer Software The software you purchase for your home office computer is a deductible business expense. This doesn't apply to the games you play during lunch, however. 

Educational Expenses Did you take some business-related classes in order to start your home based business? Be sure to include them on your taxes. Along with magazine and newsletter subscriptions, and books purchased specifically for your business use. 

Home Improvements and Repairs If your home office is deductible, then repairs and improvements to your home office would be as well. Want to spruce up that spare room and turn it into a home office? Keep your receipts! The entire project could be deductible.

 Home Office Space If your home office is the principal place you conduct business, and your home office space is used exclusively for business, this qualifies as a valid deduction on your tax return. If, however, your kitchen table is your "desk" it's unlikely you'll be able to claim a home office deduction. If at all possible, create a space in your home that is strictly for your office so you can claim a portion of your rent or mortgage, utilities and telephone as legitimate deductions. 

Home Owner's Insurance A percentage of your home owner's insurance is deductible, or renter's insurance if that applies in your case. You may also be able to include any additional riders or coverage that specifically covers your business such as for any specialized equipment you have insured.

 Meals and Entertainment While you need to use caution and not claim every meal eaten out as a business expense, a portion of legitimate meals and entertainment costs for clients, or even prospective clients, are tax deductible.

 Mortgage, Mortgage Interest and Property Taxes A percentage of your mortgage should be deductible, also. If your home office is, say 150 square feet, and your home is 1,500 square feet, 10% of the mortgage interest for your home is an allowable business deduction. The same is true if you rent your home. Whatever percentage of your home you use exclusively for your home business is deductible. And property taxes are also deductible using the same percentage calculation. 

Moving Expenses Did you move this past year? If so, you can deduct the business portion of your move. For instance, if half of the furniture and other items you moved are used for your homebased business, you can deduct a full 50 percent of your moving costs. 

Security System Do you have a security system installed in your home? The cost of the alarms and monitoring fees for the percentage of your home used as an office, and potentially your entire home, are deductible. 

Telephones and Internet Connections The IRS considers your first home phone line a personal expense, but additional line including cell phones and fax lines that you use for business are tax deductible. A percentage of your dial-up, cable or DSL fees are deductible as well.

 Transportation The cost of driving to meet clients, attend sales training and other related transportation expenses is a valid deduction for your business. The IRS raised the standard mileage reimbursement amount to 50.5 cents per mile in 2008. This can add up quickly when you have much business-related travel. However, be certain to keep detailed records. Record the odometer reading on your car when you prepare to leave and as soon as you return to get an accurate mileage count. It may be time-consuming, but can save you a small fortune on your tax return, so it's well worth the effort involved. 

While these are general guidelines on what business expenses and deductions you can and cannot claim, they will give you an idea of what to look for. Be sure, however, to consult a tax specialist as to what is allowable in your specific situation.

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