Cancel factors, never terms
You may cancel a factor common to the whole top and whole bottom — never part of a sum.
Factor first, then cancel.
Multiply and divide
Multiply straight across; to divide, multiply by the reciprocal — just like numeric fractions.
Add and subtract
Use a common denominator first.
Why factoring matters
Most "simplify" questions hide a difference of squares or a common factor. Factor the numerator and denominator before doing anything else.