• Make quarterly tax payments. Taxpayers rack up the highest amount of penalties by forgetting to pay estimated tax payments. Unless your clients withhold taxes for you from your bill or you expect to owe less than $1,000 for the year, you need to file Form 1040-ES, Estimated Tax for Individuals, and pay income taxes four times a year.

In addition, the government requires self-employed individuals to pay self-employment taxes to the Social Security and Medicare trust funds. The IRS closely monitors worker classification to ensure that all independent contractors earning at least $400 in a year pay self-employment tax. You have to comply even if you are already receiving retirement benefits.

• Neatness and accuracy count. Most IRS assessments happen because taxpayers make simple mistakes, omit relevant forms or fail to answer all the questions. These omissions are easy to correct and usually do not incur penalties. Still, it’s best to correct them before you receive an assessment notice.

If you do not use a computerized tax-filing program, use a typewriter or print neatly to ensure the IRS can read your return. When reporting your figures, use the exact numbers. The IRS will question your honesty if you have too many round numbers on your return.

• Check for inconsistencies. Always double-check the math. Inaccurate figures will incur interest and penalties, so it pays to audit your own return for errors. Make sure you received a Form 1099-MISC from every firm that paid you at least $600 over the course of the year. Check them against your records of your income.

The IRS will match the total amount of income reported for you on the 1099s it receives against your return. If it finds a discrepancy, the agency could hold you responsible for additional interest payments and penalties. Also, ensure that the numbers reported on your state and federal returns match up.

• Mix business and family with care. The IRS pays close attention to business dealings with family members. It will scrutinize dealings between two businesses owned by family members, deductions taken for payments to family members for services they performed, and deductions for medical expenses you paid for a family member who purports to do work for you.

Don’t let this warning stop you from employing a family member. Just be prepared to prove that the expenses you deduct are “ordinary and necessary” to conduct your business. The IRS examines these dealings with families because some taxpayers have pushed the law to the limit. As long as you are aware of what the law allows, you can continue to deduct bona fide business expenses.

• Use your home office exclusively for business. Draw a fine line between business and personal use of your home office space. The home office deduction is a red flag for IRS auditors because disreputable tax advisers have promoted it as a way to deduct personal expenses from net income: Some advisers have encouraged clients to boost deductions by placing business-related items throughout the house, while others have recommended deducting payments to children for routine household chores.

But the home office deduction can still be legal, and the laws governing it have become more taxpayer-friendly over the past several years. While you need to be careful with this deduction, you can take it as long as your office is your principal place of business and is used exclusively for business.

• Make profit your bottom line The most significant principle the IRS uses to judge your business deductions is the profit motive. If you are ever assessed, you need to be able to prove you are in business to make money, not trying to deduct expenses associated with a hobby.

Still, it is OK to report a loss. When you first establish your business, it is normal to have some up-front costs that cannot be recovered during the first year. Or perhaps you experienced a difficult year where you incurred an unexpected shortfall. The IRS will accept these situations as long as you can show them you were actively seeking profit and you spent more than 500 hours on the work over the course of the year. It helps to have business cards and other supporting documents such as business proposals on hand to substantiate your claim.

Once you start reporting large losses over many consecutive years, however, the IRS will start inspecting your business carefully. An auditor could require you to prove that the travel, meal, and entertainment expenses you deducted were directly related to conducting business and that the business interest was not merely incidental. This is not always easy to do, so be careful about declaring quasi-business related items.