We all know the benefits from working from home (No commute! Every day is pajama day!) and for working for yourself (Set your own schedule! No scowling manager!). But the reality of going solo is a little more complicated than any glorified expectations, especially when it comes to taxes, which are right around the corner.

And while that manager might not be hanging around telling you to show up at 9:00 am, thank you, not 9:15, he or she also arranged withholding, paid the employer's percentage of social security and Medicare (guess who pays it now!) and provided a hedge of protection against an IRS audit.

While it's a good idea to hire an accountant to prepare your taxes, or at least use a software program, it helps to be familiar with allowable deductions, since the buck now stops with you.

1. The Home Office: For example, as a self-employed person, you may have heard that your house -- which now also serves as your place of business - is brimming with deductions, including a portion of your mortgage. But be careful, cautions Michael Whitacre, Atlanta business line leader for BDO Seidman. Home-office deductions must follow very specific guidelines.

In theory, you can measure the square footage of your office and, based on that, deduct a percentage of the interest of your mortgage. But the stipulations are so tight that few self-employed people actually do it.  "Generally speaking, if you are deducting part of your house, it needs to be your primary place of business and used only for business. That's a common trap," says Whitacre. For example, you can't also have a guest bed in there for that once-a-year trip Grandma makes. Also, Whitacre says, if an auditor sees only one computer in your whole house and it's in your office, he's going to assume you use that computer for business and personal use, which is not allowed (any more than that grouchy manager would let you check Facebook). "It's hard to prove or disprove you use that area of the house solely for business," says Whitacre.

Other allowable expenses include utilities used solely for business purposes, any rent (if you store goods some place), any related security systems, and any services and repairs.

Also, deducting square footage for a home office can pose problems if you sell your house, because you've also sold your place of business, most likely for a profit. "When your house is sold later on, the gain related to any depreciation deductions will be taxable and not eligible for the exclusion for gain from a principal residence," says Whitacre.

2. Your Car: But take a look in the garage -- many people overlook their car as an expense. If your office is now your home, any travel to and from your office for business purposes is now considered an expense and is deductible. Mileage, however, must be carefully documented with the date, mileage at the start of the trip and end of the trip, and the destination. The rate is 55 cents per mile for 2008 which can add up to a huge deduction for some professions. Another option is to deduct the service and maintenance costs of the vehicle, rather than the mileage.

3. Health Insurance: Monthly premiums for health insurance are deductible, but the co-pays and out of pocket expenses related to your health care plan require some math to determine if they are allowable, says Bob Tankesley, managing member of Private Wealth Counsel. You take your adjusted gross income (income after your deductions) and then take 7.5 percent of that number. Any health care costs above that amount can be deducted. For example, if your adjusted gross income was $100,000, any amount over $7,500 could be deducted further. Of course, there are exceptions. You can't deduct a facelift or tummy tuck, or any other procedure common sense tells you the IRS wouldn't consider necessary.

4. Retirement Accounts: If you contribute to an IRA, SEP (simplified-employed pension) or a solo 401(k) plan (which allows for potentially greater contributions than an SEP), you can deduct the contribution up to a certain amount. The amount is a moving target, based on a number of factors which change year-to-year, so check with your tax professional. Contributions to your ROTH IRAs are not deductible.

5. Depreciable Assets: If yours is the type of business that requires the purchase of equipment that will depreciate in value, you can now deduct the entire cost of that equipment, up to $250,000, the year you buy it (In years past you could just deduct a percentage of the depreciation.). "Most people in a small business are not buying more than $250,000 of equipment in a year, so they can probably deduct the whole amount and get the tax benefit," says Whitacre.

6. Poor Sales: And, since every cloud has a silver lining, if you had a net operating loss last year and your revenue is under $15 million, you may qualify for a nice tax refund. Used to be you could carry the loss back two years and get a tax refund. This year, however, the rule has been extended so that if you had a loss in 2008, you can go back five years, instead of two, and get a refund.

7. Go Ahead and Pre-Pay: It helps for self-employed people to make quarterly payments for the estimated yearly taxes. Based on what you think the business will earn in a year, you can pay taxes in January, April, July and October, which will give you four days of the year to dread a little rather than one April 15 to dread a lot.

8. Keep Those Receipts: But beware: the IRS is already alerting tax professionals that it is particularly watching Schedule C filers (self-employed folk). The have suspicions that the self-employed have perhaps made mistakes in calculating their taxes and are trying to make sure no one underpays their taxes this year. Red flags include round numbers ($500.00 for paper, instead of $487.53). The golden rule is document, document, document. Invest in some inexpensive software to track your day-to-day expenses and toss the receipts in a box so that you have them if you need to prove your expenses.

9. The Self-Employment Tax: And don't forget that nasty little self-employment tax: while you continue to pay a 7.65 percent tax for social security and Medicare, you now must also pay the employer's additional 7.65 percent contribution. But, just to make it a teeny bit more complicated, half of that self-employment tax may be deductible.

At least you can write the check in your pajamas, at 9:15, while reading Facebook.

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