Understand the various taxing entities . All levels of government impose taxes. Be familiar with the requirements of each. Federal taxes include income, self-employment, estimated and employment taxes. State taxes include income, employment, sales, property, and other types of taxes that may be unique to your state.
Many municipalities impose sales and property taxes on business equipment and furniture.
A few large cities even collect income taxes. If appropriate, preserve your independent contractor status . If you operate as an independent contractor, protect that status by using written contracts and controlling how and when you do your work. If you hire independent contractors, do the same for them. If the IRS determines that a person claiming to be an independent contractor is really an employee, you could lose valuable tax deductions.