KEEP REALLY GOOD NOTES ON BUSINESS DECISIONS

Keep notes of key business decisions and the motivations behind them. It doesn't matter if your business is incorporated or not.  By keeping some form of minutes each month, describing the decisions you make in your business, these will help you PROVE why something is a genuine business deduction, even if it looks like a personal one. I.E., keeping documentation that reflects the reasons your business needs to buy a car, a computer or other business equipment, will let the IRS know WHY you bought those items.  This can also be applied to the reason behind launching a new product or marketing initiative.  If you end up with losses, these dated documentations can prove you really did have a business motive for those decisions.