June Walker provided this great guest post. And how timely is this topic? With tax season just around the corner, I ask June to give us a few tax savings tips. I am hoping I can convince her to be a regular contributor on Home Office Warrior.

Seven Tax Saving Tips for Home-Based Indies

All you self-employed home-office-workers, whether your income skyrockets in the 100s of thousands of dollars or you’re closer to $500 per year, Uncle Sam treats you all the same. That’s right, amount of income earned by an indie who works from home carries no weight with the IRS. You all must follow the same rules.

Here are seven ways to simplify complex IRS rules to fit your work-at-home style.

1. Use two offices. Forget the old husband’s tale that home office is an audit red flag. The IRS has lightened up on this. Even if you work out of two or three places, if used exclusively for your work they are all legitimate deductions. Yes, both your home office and the spare room at your country place where you do your three-hour morning blogging routine every weekend are deductible business expenses.

2. Work at home to increase your business transportation deduction. If you do most of your work outside your home office you may still deduct costs for the area of your home used exclusively and regularly for your business, no matter how small the area. And by having two work places you’ll increase your deduction for auto use or public transportation costs.

Here’s why: The IRS does not allow a deduction for commuting from home to work and back. But it does allow a deduction for getting from one workplace to another. If you work in your home office and then drive to your other workplace you are now driving “from one workplace to another.” You’ve increased your business miles and the amount of your auto deduction, or made your subway trip a business expense.

3. Careful, no office sharing allowed. Keep in mind the all-important IRS exclusive use rule: that your office must be yours and yours only. If you’re the writer for Clyde Client and your spouse handles the graphic design side of Clyde’s website and both you and your spouse use the same office – sorry, no home office deduction.

The way around that: make one spouse the employee of the other. By the way – there are a whole lot more benefits to hiring your spouse.

4. Hire your spouse. Even if your honey only helps you out with printer jams or errand running or fact checking, pay him for it. Putting him on your payroll opens up a vast array of deductions. You can provide generous employee benefits and deduct the costs of those benefits from your self-employed income. What kind of benefits? Well, for one thing, you can give him a medical plan that covers his family – that’s you and the kids. That would make your doctor bill a deductible business expense.

5. What’s a business relationship? Are you allowed to deduct a gift basket of fruit to Grandma? Of course you are — if Gram has some connection to your business. Did she show you how to hook up your scanner? Make curtains for your office?

You’re an indie business and even though you may have a personal relationship with someone, that does not rule out also having a business relationship. This is particularly pertinent in gift-giving. Of course, if you bought your client a basket of fruit as a birthday present you would treat it as a business gift deduction. But what about the friends with whom you have a business connection? If dinner at a friend’s house was planned so that she could help you with your promotion brochure, then the chocolate you arrived with is a business gift.

6. Deduct your laundry and dry-cleaning. Spill ink or red wine on your white silk blouse while attending an awards event? Dry cleaning and laundry while on a business trip are deductible expenses. You may also deduct the costs of the first dry cleaning bill after you return home. But don’t get too creative and save all your winter’s dirty clothes for cleaning the day after you return from a 3-day writers’ workshop.

7. Discuss these ideas with your tax pro before incorporating them into your business. That’s the most important tip of all. If your tax pro isn’t aware of them … time to get a new pro!

For more info on how to simplify your tax and financial life, and save you money check out my book, Self-employed Tax Solutions.

June Walker, tax and financial advisor to solo entrepreneurs worldwide since 1979, is an advocate of simplicity, order and ease in understanding a tax system that is complex, confusing and often unfair to independent professionals.

To learn more and to receive a complimentary List of Typical and Unusual Self-Employed Business Expenses please visit June Walker Online or her blog, June Walker.