Before jumping into specific mistakes that start-ups should steer clear of, let’s tackle the most common oversight: Proper record keeping. “One of the most important things is for a business to have its own set of books,” says Sam Kreamer, a tax lawyer and licensed CPA at Kreamer Law Firm. “If the entrepreneur is not a talented bookkeeper—they should hire one.” Don’t want to hire a permanent person? Then think about consulting an accountant or seeking out a mentor through SCORE or another small business non-profit to help you create an organized system, whether it’s pen and paper or Quickbooks. Then set up separate accounts for anticipated taxes like self-employment and employee withholding. “The biggest problem for many business owners is having cash on hand to pay their taxes,” says Barbara Weltman, of Big Ideas for Small Business and author of J.K. Lasser’s Small Business Taxes 2014 (Wiley, 2013). “So when money comes in, it should be segregated for taxes.”

Now that the big tripwire is out of the way, let’s look at some smaller do’s and don’ts for managing your new company’s taxes.

Don’t overlook start-up costs. As you probably know, getting an idea off the ground isn’t cheap. The good news? Almost any action you take to get started, including advertising, market research or travel to meet with potential customers, is eligible for a deduction. “Start-up costs up to $5,000 are deductible in full in the first year,” Weltman says. If your costs go over $5,000, then you can look into rolling out the deduction for up to 15 years depending on how high they are.

Do track expenses right. “For travel and entertainment costs over $75, you need not only the receipts and written proof of cost, you need to have a record of the reason,” Weltman explains. And while the IRS doesn’t require receipts for expenses under $75, it might be smart to hold on to them just as a good way to jog your memory of where you were or with whom. If you use your personal credit card for business purposes, make sure to file a timely expense report to be reimbursed by the company. If you drive a lot for work, be sure to keep proper logs. “It could be on an app that tracks your miles,” Weltman advises. “Just be sure that you’re legitimately driving for business like going to the bank to make a deposit or meeting a client. Commuting can’t be deducted.” If you do get audited, proper documentation is going to be your greatest asset.

Don’t treat equipment and supplies the same. Parsing out the difference between equipment and supplies is important in terms of taking deductions on each. Supplies are the small things you use in your office each day, like pens or post-it notes. Equipment is the big-ticket items from computers to storage facilities. “Supplies are dollar for dollar expense while equipment is required to be capsulized and encapsulated over a period of years,” says Philip R Reck, a CPA with RSB Associates and a SCORE mentor. And be aware, the rules are changing. In 2013, you could elect to deduct up to $500,000 of equipment purchases, but Congress has allowed that to expire next year and the limitation drops to $25,000.

Don’t misclassify employees: In an effort to duck paying payroll taxes, many start-ups misclassify their employees as independent contractors. “That’s a very focused area for the IRS,” Reck says. So what’s the difference between an employee and an independent contractor? “Generally the biggest factor is: How much control do you have over their time? Once you’re telling someone where to be and at what time and they aren’t working for anyone else—then it’s an employee.” If the IRS finds you guilty of misclassification, you’ll face a tidal wave of penalties and back payments of payroll taxes. “It’s enough to drive some small businesses out of business.” Plus, you might have to pay out of your own pocket—even if you’ve filed for bankruptcy. “Those are called trust fund taxes, the owners of the company can be personally liable for those,” Kreamer explains.

Do take a home office deduction if you work from home: Fear of what constitutes a home office can scare away some entrepreneurs from taking this deduction. “If you have a space for business exclusively—a kitchen table isn’t an office—but if you use a corner of your bedroom that would be fine,” Weltman says. A home office deduction was once viewed as an audit trigger, but with the rise of home-based businesses (the Small Business Administration recently reported that 52 percent of small businesses are home-based), the IRS has seemed to back off and has set up a standard deduction.