Recession or Depression, regardless of what you want to call it, everyone is going to be affected by the economic situation that we are in, if you have not already.Today they jobless claims dropped instead of rose and some are saying that the recession is over and we are going to be on the upswing. Regardless, it will take many years before I think the effects of what has been happening here in this country are realized. And I feel that the next few years will actually wind up being harder than this past year.There is no doubt in my mind that our taxes are going to be increased, regardless what the current administration says. The question I had was how can I limit or minimize the impact of those tax increases when they do come. And they will. It may not be how we think, but the government has to pay for the bailouts some how.I have known for years that having a business based out of my home has saved me thousands on my taxes. And this was while I was still working as an employee. When you realize that there are ways to work within the IRS guidelines to reduce your tax liability, you will wonder why you didn’t start a home based business sooner!If you are running a legitimate business out of your home, but still bringing in a regular paycheck from a job, the deductions that you are allowed to take, can be transferred immediately to your paycheck, thereby giving you an instant pay raise.So starting a home based business will allow you to take more deductions. More deductions means that there is less taken out of your paycheck each week. Having a home based business is just like having additional children. The key is keeping accurate records, understanding the basics of the tax laws in regards to being in business, and filing the proper forms when the time comes to file your taxes.Don’t assume that your current CPA will know how to treat home based business deductions. I have found that a lot of CPA’s lack the knowledge that is needed in the home based arena to be adequate in understanding what is required from someone who works from home, versus someone who works at a corporation.Do your research, become educated. You don’t have to become a CPA to know how to run a business. You just have to know what to do regarding your type of business and how the IRS relates to it. When you see the amount of money you can save by doing your due diligence, you will be glad that you got educated.