1099 Deductions Guide
Every common deduction available to freelancers and 1099 workers — reduce your tax bill legally.
By Reba Donaldson · Last reviewed: April 2026
Why deductions matter for 1099 workers
Unlike W-2 employees who have very limited deduction options, self-employed people can deduct all ordinary and necessary business expenses from their gross income. These deductions reduce your net profit — the number your income tax and self-employment tax are calculated on. Every $1,000 in legitimate deductions saves you roughly $250–$400 in taxes depending on your bracket.
Use our interactive deductions checklist tool to see your estimated deduction total in real time.
Home Office HIGH VALUE
If you use part of your home exclusively and regularly for business, you can deduct either $5 per square foot (up to 300 sq ft) using the simplified method, or the actual percentage of home expenses (mortgage/rent, utilities, insurance) proportional to your office space.
Equipment & Technology HIGH VALUE
Computers, monitors, phones, tablets, cameras, microphones, and other equipment used for business. Can be deducted in full the year of purchase (Section 179) or depreciated over several years.
Software & Subscriptions
Business software, SaaS tools, project management apps, design tools, accounting software, cloud storage, and professional subscriptions directly related to your work.
Internet & Phone
The business-use percentage of your internet and phone bills. If you use your phone 60% for business, you can deduct 60% of the bill.
Health Insurance Premiums HIGH VALUE
Self-employed people can deduct 100% of health, dental, and vision insurance premiums for themselves and their family — as an above-the-line deduction, not subject to the 7.5% AGI floor.
Retirement Contributions HIGH VALUE
Contributions to a SEP-IRA (up to 25% of net self-employment income), Solo 401(k), or SIMPLE IRA are fully deductible. This is one of the highest-value deductions available to self-employed people.
Vehicle & Mileage
Business-related driving can be deducted at the standard mileage rate (67 cents per mile in 2024) or actual vehicle expenses proportional to business use. Keep a mileage log.
Travel
Airfare, hotels, and 50% of meals for business travel away from home overnight. Must be primarily for business purposes.
Professional Development
Courses, books, workshops, conferences, and training directly related to maintaining or improving skills in your current business.
Professional Services
Accountant or CPA fees, attorney fees related to your business, and business consulting fees.
Marketing & Advertising
Website hosting, domain names, advertising, business cards, and any costs to market your services.
Office Supplies
Paper, pens, printer ink, postage, and other consumable supplies used for business.
The golden rule: ordinary and necessary
The IRS allows deductions for expenses that are "ordinary and necessary" for your business. Ordinary means common in your industry. Necessary means helpful and appropriate. When in doubt, ask: would I have this expense if I didn't have this business? If the answer is no, it's probably deductible.
Keep records for everything
The IRS can audit up to 3 years back (6 years if they suspect substantial underreporting). Keep receipts, bank statements, and records for every deduction you claim. Accounting software like QuickBooks Self-Employed or Wave makes this much easier.