Common Business Deductions

Consultants and business owners can write off a variety of common business expenses against their taxes. Expenses that are typical for many consultants include software, supplies, travel, postage, and continuing education. Consultants also can deduct the cost of health insurance as an adjustment to income, which means they don't have to itemize to get the deduction. Consultants can deducting a portion of their personal rent or mortgage interest if there's an office in their home.

Consultants should develop a system for keeping track of their expenses. I typically recommend Peachtree Accounting or Quickbooks. But I have seen many clients keep their records using Quicken, Microsoft Money, or an Excel spreadsheet.