When you own your own small business, it is important to run it as much like a business as possible, so that you can deduct business expenses from your gross profit. This reduces your tax liability and is usually a more accurate reflection of what you are making from your business.

For instance, say you have a business making scented candles. The supplies with which you make these candles — wax, scent, wicks, molds and/or jars, etc. — cost money and therefore cut into the profit that you make from your business. If you keep close track of these expenses, keeping the receipts so that you can prove the expenses to the IRS if necessary, you may be able to deduct the cost of these things from your gross income on your tax return.

The best thing to do is to consult your tax attorney or accountant to help you make sure you aren’t paying too much (or too little) on your taxes. If you feel confident that you understand tax law well enough on your own, you could do your taxes yourself, but be sure if you err it’s on the side of caution — you don’t want to get into trouble for owing the government money on back taxes because of some silly error you made somewhere down the line!

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