One of the myths surrounding home business tax preparation is that if you deduct a portion of your mortgage for your home office space deduction, it is a red flag to the IRS, and will put your return in greater danger of audit.

While this may have been true in the past, it is becoming less and less the case. This is because many people are earning money from home, and telecommuting is on the rise. The IRS recognizes that an increasing number of people are choosing to deduct a portion of their mortgage or rent payments (and utilities) on their taxes.

Of course, it is important to realize that if you want to take that deduction, the space in question has to be dedicated home business space — and not used for anything else.