Know what you will need to file.
Different types of companies and businesses require different forms, depending on how much you made, whether you are incorporated or not, and a number of other factors. You will also need to be sure and get a federal Tax Identification Number from the IRS, which you can apply for on the IRS' website. Generally speaking, most people who have a home or small business can expect the following:

 Federal, state and local income taxes on your earnings from your business
 Self-employment taxes (about 15.3 percent) on everything you've earned from over $400. These taxes are paid quarterly.
 Schedule C form (income or loss from a trade or business), which will also need to be filed with your Form 1040 each year you have your business

Know the deductions you should take
Claiming excessive deductions, or making deductions that seem too large for your income, could arouse suspicion in the IRS. While you should definitely take all of the deductions you are entitles to, it is important to be able to prove that they are legitimate and that you are eligible. For example, you can't write off a family computer that sits in the family room as a home office; in order to write off home office items, you must have an actual, separate office space in your home.

In cases such as these, tax help software and your tax advisor, accountant, or tax professional can help you to be aware of what is and what is not eligible for deductions.

Save receipts and financial information.
One of the most important things you will need to do for your home business is keep very detailed financial records. You should save all receipts for anything business-related, invoices, order forms, and anything else that may have to do with expenses for your business. Not only will this help you to keep track of your ingoing and outgoing expenses, but if you are audited, you will need all this information as well.

Keep your information in an organized fashion by storing them in filing cabinets or folders. You may even want to scan the important information and saving it to your computer. It also helps to have accounting programs installed on your computer for easy access.

Get help
If this is your first year filing as a small or home business, you may want to get professional help from an accountant or tax adviser. Self-employment taxes can be tricky, and someone who is experienced with them can help save you money in the long run.

These are just a few things you can do to ensure you are square with the IRS when tax time comes.