1099Local

The 1099 deductions checklist — what actually reduces your tax

Every deductible dollar saves you both income tax and self-employment tax at once — around 23 cents combined for a mid-income solo freelancer, and 30–40 cents for someone whose side income stacks on a salaried bracket (the worked numbers are at the end). That’s why expense tracking is the highest-paid clerical work a freelancer does, and why this list is organized by what’s actually at stake rather than alphabetically. The legal standard throughout: expenses must be ordinary (normal for your line of work) and necessary (helpful and appropriate — not “indispensable”). Keep records; every rule below assumes you can show the receipt.

The big three

Vehicle use. For 2026 the standard mileage rate is 72.5¢ per business mile through June 30 and 76¢ from July 1 (the IRS raised it mid-year for fuel costs). That single rate replaces gas, maintenance, insurance and depreciation; tolls and parking add on top. Alternatively, deduct actual car costs times business-use percentage — more records, sometimes more money for expensive vehicles. Two iron rules: commuting is never deductible, and no log means no deduction when challenged. Delivery and rideshare drivers: mileage is usually your entire tax story — see the DoorDash page.

Home office. Deductible when a space is used regularly and exclusively for the business — the exclusivity test is the one that fails (“also the guest room” ends it). The simplified method pays $5 per square foot up to 300 sq ft ($1,500 max) with no records beyond the measurement; the regular method deducts the business share of actual housing costs and can beat it substantially for renters with real square footage. Bonus: a qualifying home office that’s your principal place of business converts driving from home to work sites into business mileage.

Health insurance. Buy your own coverage and premiums for you, spouse and dependents are deductible off the top of income (not just Schedule C) — for a family plan, easily five figures. Limits: only up to business profit, and not for months you were eligible for an employer plan (yours or a spouse’s). This one is skipped by an astonishing number of DIY returns.

The dependable middle

Retirement: the deduction you give yourself

A solo 401(k) or SEP-IRA lets a self-employed person shelter a serious slice of profit — contribution ceilings run well into five figures depending on income and plan type. It reduces income tax (not SE tax), and unlike every other deduction here, the money is still yours. If you’re profitable and not funding one, that’s usually the largest single line you’re leaving on the table. Numbers move annually — this is a “confirm current-year limits” item by design, and our estimator deliberately doesn’t model it (your real bill may be lower than its estimate if you contribute).

The deductions that don’t exist

The folklore list, debunked: your own labor (no deduction for hours worked), clothes that could be worn normally (a suit isn’t deductible; logo’d safety gear is), the whole internet/phone bill (percentage only), commuting (no matter the podcast you learned from), meals with no business character (the 50% meals rule needs a business meal, not lunch near your desk), gym memberships for “looking professional,” a home office that’s also the dining room, and bad debts for unpaid invoices (cash-basis filers never reported that income, so there’s nothing to write off — the invoice just dies).

Claiming these isn’t clever; they’re the exact patterns automated matching and audits look for. The honest list above is worth more anyway.

The system that makes it real

Deductions are won in the recording, not the remembering: a separate business bank account and card (so statements are the expense log), a receipt habit (photo apps are fine — paper fades), a mileage app if you drive, and a monthly fifteen-minute reconcile. In April you’ll have a number instead of a guess — and through the year, the calculator can turn that running expense total into the quarterly payment it actually changes. Our own engine’s math for a single filer: $60,000 of revenue with $10,000 of tracked expenses owes $9,732 federal versus $12,037 with none — $2,305 saved, about 23 cents per deducted dollar. A W-2-plus-side-gig filer in a higher bracket saves 30–40 cents on the same dollar. Either way, decent pay for a shoebox and a habit.

Compiled July 2026; mileage and home-office figures from IRS sources (methodology). General information — categories have exceptions, and a preparer who knows your trade earns their fee. State rules differ.