1. Know your forms:- The first step is determining the correct tax form to use. In essence, every business needs to report its business earnings to the IRS and pay taxes, but the exact forms you'll use depend on your business structure.Partnerships report their income/losses/expenses on Form 1065. If you are a sole proprietor, then you report your business income and expenses on a Schedule C attached to your personal income tax return. Likewise, if your business is an LLC treated as a sole prop, you also use the Schedule C attachment. But if you have a corporation or have elected to treat your LLC as a corporation, then you will need to prepare a separate corporate tax return with Form 1120. Use Form 1120S is if you have elected S Corporation Status.The IRS provides helpful tables that break down the necessary tax forms for each business type.2. Home office deduction:- Many small business owners are intimidated from taking the home office deduction, because they've been told it's a red flag for an IRS audit. However, if you are legitimately entitled to the deduction, you should take it, as it can add up to thousands of dollars in deductions. In order to qualify for the deduction, you need to have a dedicated space in the home that you use solely for the business and nothing else (and proof of that fact).Starting with the 2021 return, you now have the option to use a simplified method for calculating the home office deduction. In the past, you needed to add up your actual costs (mortgage/rent, utilities, etc.) and multiply that figure by the percentage of your home that's dedicated to your office.While the simplified deduction will save you time and paperwork, it may give you a smaller deduction. Savvy tax filers should calculate the home office deduction using both methods and see which is more advantageous. Of course, if you haven't kept track of your home expenses and don't have documentation to back it up, then you should take the simplified deduction.3. Properly classify your office equipment:- First-time and experienced business filers often get tripped up when categorizing expenses as equipment versus supplies. Supplies include things that you used during the year, such as printer paper, pens and printer ink.Equipment (also called capital expenditures) are typically higher-value items that will last significantly longer than one year. Computers, software, office furniture, and servers are all examples of equipment. With the Section 179 deduction, you are able to write off the entire cost of new equipment in one year (up to $500,000), rather than taking depreciation over multiple years.Add up any computers, software, and other equipment you purchased in 2021 in order to get a greater deduction for 2021. And make sure to report these purchases on Form 4562.4. Deduct your insurance costs:- Any insurance premiums related to liability, malpractice, workers' comp, and property are typically deductible as business expenses. Commercial vehicle insurance and life insurance premiums may also be deductible, but rules vary by business type.Business owners of sole proprietorships, partnerships, and S Corporations may be able to deduct the premiums paid for medical and dental insurance for themselves, their spouse, and dependents. In addition, if you have a company with fewer than 25 full-time employees and pay at least half of your employees' health insurance premiums, you may qualify for a tax credit up to 35% of the cost under the Small Business Health Care Act.5. Keep tabs on travel and entertaining expenses:- Did you drive to meet with potential clients, fly out to an industry seminar or tradeshow, or take a client to dinner or a baseball game? If so, you may be able to deduct some of these expenses.For example:If you picked up the tab for entertaining a current or prospective client, you can deduct 50% of the cost as long as business was discussed at the event or the entertainment takes place immediately before or after a business discussion. Be sure to write notes on the receipt, such as whom you were meeting with and what business was discussed.You can deduct 100% of your travel costs if the primary purpose of your trip is for business. If you get some downtime and are able to stay a few extra days after the business is done, that's fine. But, don't try to expense your airfare for a seven-day trip to the Florida Keys for a two-hour meeting.6. Small deductions add up:- Small business owners should keep track of any miscellaneous expenses, as these can really add up over the course of a year. For example, did you buy any books or take an online course to hone your skills? Did you pay dues to an industry organization? These can all be write-offs. Likewise, any interest on credit used to finance business purchases is fully deductible. If you drive to meet with customers, you can take a standard mileage rate deduction (it's 56.5 cents per mile for 2013). And don't forget other business expenses such as web hosting, Internet bill, mobile phone plans, stamps, printer ink and so on.7. Need more time?If the deadline is approaching too quickly for your taste, you can file for an extension. It's better to get your return right than rush to meet the deadline. However, keep in mind that while you get extra time to file, you don't get extra time to pay. If you need to ask for an extension and anticipate you will owe money, you should ewhat you owe and send the payment when you request the extension. Otherwise, you'll be stuck with interest and penalties when you finally do send everything in.