Eleven entrepreneurs, some looking to start businesses, others already under way, attended the session.

Patricia Jenkins, an Albuquerque-based tax agent, led the workshop along with Greg Neeley, a senior revenue agent at the New Mexico Taxation and Revenue Department.

"What I try to do is keep them legal," said Jenkins, who is part of the Society of Enrolled Agents registered with the U.S. Internal Revenue Service.

Start-ups face a range of issues, from registering with the state to deciding whether to use employees or independent contractors.

Jenkins urged entrepreneurs to fight for what is best for them.

"Taxes are not black and white," she said. "They're shades of gray."

Among Jenkins' tips:

• Get a good tax agent, insurance agent and bank. All of them will come in handy.
  
• Avoid entering business partnerships with family members. They often end badly.
  
• Businesses can be registered in several different ways, including as limited liability companies or sole proprietorships. Each type of business organization has advantages and disadvantages that must be weighed.
  
• Areas on tax forms that tend to trigger audits include mileage, business meals and high dollar amounts listed as "miscellaneous" tax write-offs. The Internal Revenue Service also tends to be suspicious of large, round numbers. Use specific figures.
  
• Be careful when adding your first employees. You will need to pay them and payroll taxes before vendors and your own salary.

"How many of you are thinking about employees?" Jenkins asked. "They're the most dangerous things in the world."

Participants in the small business tax workshop included a painter, a furniture maker, a construction contractor, a honey producer and a psychotherapist.

Adam Telford recently obtained a license for his new photography studio business, Natural Images of Farmington. Telford came to learn how to pay his business taxes.

"I've had a couple of paying clients and I have no clue how to do the reporting on them," he said.

James Hatley, a longtime construction worker who aims to start a furniture making business, attended to learn about establishing his own firm.

Jenkins said it pays for business owners to fight against letters from taxing authorities telling business owners they owe.

"If you get a state notice or an IRS notice, don't assume they're right and you're wrong," she said. "Always question it."

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