Tax filing time always comes, wanted or not. Home business owners need to have needed records saved and ready to use. But what type of records are needed for business tax returns or records?

Income. All income from the business must be recorded. Outside income, such as a salary from another job, is needed for personal income taxes, but it is not figured as part of business income.

Expenses. Expenses directly tied to the business should be recorded and used: small equipment, business supplies, postage and shipping, operating expenses, casualty losses, and depreciation. In the case of authors, fees paid for editing, agents, sending manuscripts, printing expenses, and so forth are deductible.

Another expense is the carryover of expenses from the year before.

This year, according to Howard Scott (The Writer, January 2008) the IRS is allowing new tax breaks for home-office deductions: The calculation uses personal house expenses to create business deductions. Scott summarizes the changes in "IRS opens a NEW DOOR for home office." Some of his comments include the following:

1. New qualifications for a home office are if the space is used to conduct substantial work and the space is used exclusively for business. The interesting point is the IRS lets you decide how much is sufficient or substantial.

Exclusively and regularly means the space is used for nothing more than the work (writing for an author) and more than occasionally.

The "office" may be a desk in one corner of the living room or a bedroom or a separate room. If the space used for business is a desk in one part of a room, then "the space allowed for the business will be limited to the desk area."

2. Another change is the fact that if you have a home office and use another part of your home for storage of materials, research or library, even if that space isn't used exclusively for work, the space can be claimed, too.

3. Mileage and car expenses can be deducted by including "all travel to and from the home office to relevant outside destinations. Without a home office, no commuting miles are allowed."

The result is the home worker benefits by deducted all relevant direct and proportionate house expenses as business expenses, including utilities (not water), mortgage interest payments, property taxes, repairs, renovation, insurance, and depreciation.

However, repairs to the home office itself, such as remodeling, are 100 percent deductible.

One thought to remember is the home-office expenses cannot be used to create a business loss.

Unlike the past, the "home-office" does not have to be the person's principal place of business. More and more people are working at home, even if employed by a company with offices elsewhere.

In today's work world, home offices are part of normal business practice, and the IRS is accepting the fact.