In this part, you will learn how to report your income from a business or profession, and how to reduce your tax liability by claiming expense deductions. Pay special attention to—

• Reporting rules for income and expenses on Schedule C (Chapter 40).
• Restrictions on deducting home office expenses. Your deduction may be limited by a restrictive income test (Chapter 40).
• The increased deduction for qualified domestic production activities income (Chapter 40).
• SEP, and SIMPLE, and qualified retirement plan rules if you are self-employed. These plans offer tax deductions for contributions and tax-free accumulation of income within the plan.
• Health savings accounts and other medical plans (Chapter 41).
• First-year expensing and depreciation write-offs for business assets (Chapter 42).
• The IRS mileage allowance as an alternative to claiming operating expenses and depreciation for your business automobile (Chapter 43).
• Reporting sales of business property on Form 4797 (Chapter 44).
• Computing and paying self-employment tax on self-employment earnings from a business or profession (Chapter 45).