There are many hints or suggestions I can give a new businessman, but I do not have that much room.  I will give you five very important hints to keep you straight with the IRS.  First, form your business as a corporation or Limited Liability Company (LLC). Second, make the choice to have your company or LLC taxed as an S-Corporation.  Do not report your company earnings on a Schedule C. Third, keep good business and personal records in a safe place for at least seven years.  Fourth, respect Form 1099’s.  When you get one, check it for accuracy and always account for it on your return.  To not do so invites an audit.  Five, keep your business and personal life and expenses separate.  Mixing business and personal income and expenses is another sure way to lose an audit.