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To see all the business expenses you can claim on your federal tax return, go to IRS.gov and search on the form called Schedule C (a.k.a. Profit or Loss from Business). See Part II on the form, which lists twenty different types of expenses. Again, this is only for sole proprietorships.

So which business expenses are deductible? Those most applicable to new freelancers include:

• Advertising (business cards and online ads included)

• Business insurance (but not health insurance; see next page)

• Business and professional licenses

• Business phone and Internet access

• Client gifts (you can only deduct $25 per client a year)

• Industry-related books, classes, and events

• Interest on business credit cards and loans (must be used solely for business)

• Memberships to professional associations

• Office space rental, utilities, and expenses

• Office supplies and equipment, as well as any necessary repairs

• PO box, postage, shipping costs, and photocopies

• Professional services (lawyer, accountant, web designer)

• Public transportation (to business-related meetings and events)

• Subscriptions to industry publications and services

A few other write-offs warrant a bit more explanation:

CAR AND TRUCK EXPENSES. There are two ways to write off the business use of your automobile. You can claim the cost of repairs, gas, insurance, registration, and the like—what the IRS calls the “actual expense” method. Or if you’ve carefully documented your business mileage (here’s where that notebook in the car comes in handy), you can use what Uncle Sam calls the “standard mileage rate” method, meaning you deduct a fixed amount per mile (58.5 cents as of July 1, 2008; the IRS raises this periodically). Use whichever method yields you the biggest deduction, but know that you can’t use the actual method one year and then switch to the standard method the next. So if you want to use the standard method, do it from the start. Either way, you can claim parking and tolls as an expense.

HEALTH INSURANCE. While we sole proprietors can’t deduct our health insurance premiums on our Schedule C form, where it would save us the most money as self-employed professionals, we can deduct this cost on the main part of our Form 1040 (a.k.a., Individual Income Tax Return). Your tax preparer knows all about this; all you need to do is provide her with the amount you spend on health insurance premiums each year.

TRAVEL, MEALS, AND ENTERTAINMENT. If you take a potential new client to dinner, you can write off 50 percent of the restaurant bill. Don’t go crazy though. A bunch of $500 dinner bills may cause the IRS to raise an eyebrow. Business trips and conventions are deductible, too. For a bigger tax savings, you can schedule a couple of business meetings or presentations during a personal vacation and write off part of the trip. (Your accountant can help you determine how much.)

HOME OFFICE. If you work from home, you can deduct your office space if you use the space strictly for business (it shouldn’t double as a guest or storage room), you use it regularly (not just a couple times a month), and it’s contained in one nice, neat area (as opposed to three different corners of your house). Basically, you measure your office and deduct whatever percentage of your home it amounts to on your tax return (mine’s 30 percent). You can also deduct this same percentage of your home utility bills.

Note that if you’ve been in business three years without making a profit but continue to deduct your professional expenses (photography equipment, Internet access, computer software), you’re asking for trouble—in other words, an audit. The IRS will consider you a hobbyist rather than a business owner, meaning your deductions won’t be justified (meaning you’ll probably owe back taxes, plus interest).

You may have heard it said that you should incorporate your business to reduce the amount of taxes you owe. But when you’re just starting