The IRS isn't above checking your phone records and credit card statements against your work log if the examiners have doubts about your business deductions.

FORBES: Audits: The IRS' Big Stick

Inventory your financial records, organize your paperwork, develop a spending plan and summarize your credit card debt.

FORBES: Weathering a Financial Storm

The section on public records will include bankruptcies, liens and judgments--items guaranteed to pound your credit rating.

FORBES: Magazine Article

Finally, keep your business and personal debts separate: Don't use your "small business" credit card for personal expenses, and if you tap your home equity to fund your business, keep records showing where the money went.

FORBES: Investment Guide