1099 deductions list for 2026
Key takeaways
- Every business expense you list on Schedule C lowers both your income tax and your 15.3% self-employment tax, so $1,000 of expenses cuts self-employment tax by about $141 before any income tax savings.1
- You can deduct a cost if it is ordinary and necessary for your business, and where you claim it decides what it saves: Schedule C for business costs, and Schedule 1 for half of your self-employment tax, health insurance, retirement, and HSA contributions, which lower income tax only.2
- Start with the Schedule C lines that match what you spent, add the Schedule 1 deductions you qualify for, and run your profit through the Solvent self-employment tax calculator to see what your deductions save.
In this article
- What can you deduct as a 1099 worker?
- 1099 deductions at a glance
- Business expenses you deduct on Schedule C
- Other expenses you list in Part V of Schedule C
- Deductions that go on Schedule 1 or Form 1040
- 3 differences between Schedule C deductions and other 1099 deductions
- What changed for 1099 deductions in 2026?
- What you can't deduct as a 1099 worker
- How to keep records for 1099 deductions in 3 steps
- How much does a 1099 deduction save?
- How to estimate quarterly taxes after your 1099 deductions
- Frequently asked questions about 1099 deductions
Key takeaways
- Every business expense you list on Schedule C lowers both your income tax and your 15.3% self-employment tax, so $1,000 of expenses cuts self-employment tax by about $141 before any income tax savings.1
- You can deduct a cost if it is ordinary and necessary for your business, and where you claim it decides what it saves: Schedule C for business costs, and Schedule 1 for half of your self-employment tax, health insurance, retirement, and HSA contributions, which lower income tax only.2
- Start with the Schedule C lines that match what you spent, add the Schedule 1 deductions you qualify for, and run your profit through the Solvent self-employment tax calculator to see what your deductions save.
A 1099 deduction is a cost a freelancer, contractor, or gig worker can subtract from business income or total income. Most go on Schedule C, one line per type of expense, and a few go on Schedule 1 or Form 1040. Each entry below says what the deduction is, where it goes, and its 2026 figure. This guide lists 29 deductions and what each one saves.
What can you deduct as a 1099 worker?
You can deduct any business expense as a 1099 worker if it is ordinary and necessary, meaning common in your line of work and helpful to it, plus a few deductions the tax code gives the self-employed. Three rules decide how they work:
- Where they go: Business expenses go onSchedule C and reduce your net profit, and the self-employed deductions go on Schedule 1 or Form 1040 and reduce your income for income tax.
- No itemizing: Schedule C and Schedule 1 deductions are separate from the standard deduction, so you take both.
- Business share only: A cost you also use personally, such as a phone, a car, or a room, is deductible only for its business share.
1099 deductions at a glance
These 29 deductions cover what most freelancers, contractors, and gig workers spend money on, with the line each one goes on.
| # | Deduction | Where it goes | Lowers SE tax? | 2026 figure or limit |
|---|---|---|---|---|
| 1 | Advertising and marketing | Schedule C, line 8 | Yes | None |
| 2 | Car and truck expenses | Schedule C, line 9 | Yes | 72.5 cents a mile Jan to Jun, 76 cents Jul to Dec |
| 3 | Commissions and platform fees | Schedule C, line 10 | Yes | None |
| 4 | Contract labor | Schedule C, line 11 | Yes | 1099-NEC due for $2,000 or more |
| 5 | Equipment and depreciation | Schedule C, line 13 (Form 4562) | Yes | Section 179 up to $2,560,000 |
| 6 | Business insurance | Schedule C, line 15 | Yes | None |
| 7 | Business loan and credit card interest | Schedule C, line 16 | Yes | Business share only |
| 8 | Legal, accounting, and tax prep fees | Schedule C, line 17 | Yes | Business share only |
| 9 | Office expenses | Schedule C, line 18 | Yes | None |
| 10 | Rent | Schedule C, line 20a or 20b | Yes | None |
| 11 | Repairs and maintenance | Schedule C, line 21 | Yes | None |
| 12 | Supplies | Schedule C, line 22 | Yes | None |
| 13 | Business taxes and licenses | Schedule C, line 23 | Yes | Not income tax |
| 14 | Business travel | Schedule C, line 24a | Yes | Overnight trips |
| 15 | Business meals | Schedule C, line 24b | Yes | 50% deductible |
| 16 | Phone, internet, and utilities | Schedule C, line 25 | Yes | Business share only |
| 17 | Employee wages and benefits | Schedule C, lines 14, 19, and 26 | Yes | Employees only, not you |
| 18 | Home office | Schedule C, line 30 | Yes | Simplified: $5 a sq ft, up to 300 sq ft |
| 19 | Cost of goods sold | Schedule C, Part III, line 4 | Yes | Sellers only |
| 20 | Software and subscriptions | Schedule C, Part V | Yes | None |
| 21 | Education, training, and dues | Schedule C, Part V | Yes | Current business only |
| 22 | Business gifts | Schedule C, Part V | Yes | $25 per person a year |
| 23 | Startup costs | Schedule C, Part V | Yes | Up to $5,000 the first year |
| 24 | Half of your self-employment tax | Schedule 1, line 15 | No | Half of SE tax |
| 25 | Self-employed health insurance | Schedule 1, line 17 | No | Up to your business profit |
| 26 | Retirement plan contributions | Schedule 1, line 16 | No | Up to $72,000 |
| 27 | HSA contributions | Schedule 1, line 13 | No | $4,400 self-only, $8,750 family |
| 28 | QBI deduction | Form 1040, line 13a | No | 20% of QBI, $400 minimum |
| 29 | No tax on tips | Schedule 1-A, Form 1040 line 13b | No | Up to $25,000 |
Schedule C lines from the 2025 form.
Business expenses you deduct on Schedule C
Business expenses you deduct on Schedule C go on the Part II line that matches the expense, and each one lowers both your income tax and your self-employment tax. The Schedule C instructions guide walks through every line.
1. Advertising and marketing
Advertising and marketing costs, such as ads, a website, business cards, and promotional email tools, go on line 8. Paid social posts, search ads, and promoted listings on a marketplace count too.
2. Car and truck expenses
Car and truck expenses for business driving go on line 9, figured with the standard mileage rate or your actual costs. For 2026, the standard mileage rate is 72.5 cents a mile from January 1 to June 30 and 76 cents from July 1 to December 31, plus parking and tolls.3 Commuting from home to a regular workplace does not count, and the IRS mileage rate and mileage deduction guides cover the rate split and how to claim it.
3. Commissions and platform fees
Commissions and fees you pay to get paid, such as a marketplace's service fee or a referral commission, go on line 10. A fee that is capitalized or deducted on another line does not go here.
4. Contract labor
Payments to freelancers or contractors who work for your business go on line 11. For 2026, you send a contractor Form 1099-NEC once you pay them $2,000 or more in the year.
5. Equipment and depreciation
Equipment that lasts more than a year, such as a computer, camera, or tools, is depreciated on line 13, usually through Form 4562. For 2026, Section 179 lets you deduct up to $2,560,000 of equipment in the year you place it in service, and 100% bonus depreciation applies to qualified property acquired after January 19, 2025. Items that cost $2,500 or less each can be expensed under the de minimis safe harbor instead, and the Section 179 deduction guide covers the election.
6. Business insurance
Business insurance, such as general liability, professional liability, and business property coverage, goes on line 15. Your own health insurance does not go here, and entry 25 covers where it goes.
7. Business loan and credit card interest
Interest on a business loan or the business share of a credit card goes on line 16. The 2026 draft form splits line 16 into mortgage, vehicle loan, and other interest, so check the line against the final form.
8. Legal, accounting, and tax prep fees
Fees for a lawyer, accountant, or bookkeeper, and the business part of tax preparation, go on line 17. Preparing the personal part of your return is not a business expense.
9. Office expenses
Office expenses, such as postage, printer ink, and small office items, go on line 18. Larger items that last more than a year belong with equipment in entry 5.
10. Rent for an office, coworking space, or equipment
Rent for business property, such as an office or a coworking membership, goes on line 20b, and rent or lease payments for vehicles, machinery, or equipment go on line 20a. Rent on your home goes through the home office deduction on line 30, not here.
11. Repairs and maintenance
Repairs and maintenance that keep business equipment or property working go on line 21. An improvement that adds value or extends the life of an asset is depreciated instead.
12. Supplies
Supplies you use up in the business, such as materials, cleaning supplies, and small tools, go on line 22. If you sell products, the materials that go into them are part of cost of goods sold in entry 19.
13. Business taxes and licenses
Business licenses, permits, and the employer share of payroll taxes go on line 23. Federal income tax is never deductible, and half of your self-employment tax goes on Schedule 1 (entry 24).
14. Business travel
Travel away from your tax home overnight for business, including airfare, lodging, and local transport on the trip, goes on line 24a. Meals on the trip go on line 24b, covered in entry 15.
15. Business meals
Business meals with a client, or meals on an overnight business trip, go on line 24b, and you can deduct 50% of the cost. A meal can't be lavish or extravagant, and you or an employee must be present.
16. Phone, internet, and utilities
The business share of your phone, internet, and utilities is deductible, and phone and utility costs go on line 25. The base rate of the first phone line in your home is not deductible, and a home office's share of utilities goes through line 30 instead.
17. Employee wages and benefits
Wages you pay employees go on line 26, their benefit programs on line 14, and their retirement plan contributions on line 19. Your own pay is not a deduction, and your own retirement and health insurance go on Schedule 1.
18. Home office
A part of your home used regularly and only for business is deducted on line 30. The simplified method gives $5 a square foot for up to 300 square feet, a $1,500 maximum, and the regular method uses Form 8829 and your actual home costs. The home office deduction guide covers the tests and both methods.
19. Cost of goods sold
If you sell products, the cost of the inventory you sold is figured in Part III and carried to line 4, not deducted as an expense. The Schedule C instructions guide covers Part III line by line.
Other expenses you list in Part V of Schedule C
Other expenses you list in Part V of Schedule C are business costs with no line of their own, and their total carries to line 27b. They lower your self-employment tax the same way a Part II expense does.
20. Software and subscriptions
Software and subscriptions you use for the business, such as design tools, accounting software, and cloud storage, go in Part V. Part V asks for a description and an amount for each type of expense.
21. Education, training, and professional dues
Courses, conferences, and professional memberships go in Part V if they maintain or improve skills for the business you already run. Training for a new line of work is not deductible.
22. Business gifts
Business gifts to clients go in Part V, and you can deduct no more than $25 for each person a year.4 A gift that costs more is still deductible up to $25.
23. Startup costs
Startup costs, such as market research and advertising before you open, go in Part V, and you can elect to deduct up to $5,000 in the first year.5 The $5,000 is reduced by the amount your startup costs exceed $50,000, and the rest is amortized on Form 4562.
Deductions that go on Schedule 1 or Form 1040
Six deductions for the self-employed go on Schedule 1 or Form 1040 instead of Schedule C, and they lower your income tax but not your self-employment tax. Schedule SE starts from your Schedule C profit, so a deduction claimed after it does not change the tax.
24. Half of your self-employment tax
You deduct half of your self-employment tax on Schedule 1, line 15, after figuring the tax on Schedule SE. Schedule SE figures the tax on 92.35% of your net profit, so this deduction comes after the tax is set and lowers your income tax only. The self-employment tax guide covers the wage base and the rest of the mechanics.
25. Self-employed health insurance
Health, dental, and qualified long-term care premiums for you, your spouse, and your dependents go on Schedule 1, line 17. You can count only the months you weren't eligible for a subsidized employer plan, including a spouse's. The deduction cannot exceed your net profit from the business, and the Schedule C instructions guide answers the common questions about it.
26. Retirement plan contributions
Your own contributions to a SEP IRA, SIMPLE IRA, or Solo 401(k) go on Schedule 1, line 16. For 2026, a Solo 401(k) allows up to $24,500 of employee deferrals and $72,000 in total. Solo 401(k) vs SEP IRA compares which plan fits.
27. Health savings account contributions
Contributions to a health savings account go on Schedule 1, line 13, through Form 8889, if you have a qualifying high-deductible health plan. For 2026, the limit is $4,400 for self-only coverage and $8,750 for family coverage.
28. QBI deduction
The QBI deduction lets you deduct up to 20% of your qualified business income on Form 1040, line 13a, through Form 8995. Starting in 2026, the deduction is at least $400 if you have $1,000 or more of qualified business income from a business you materially participate in, and the QBI deduction guide covers the thresholds.
29. No tax on tips
If you work in an occupation that customarily received tips, such as delivery, you can deduct up to $25,000 of qualified tips a year from 2025 to 2028 on Schedule 1-A. For the self-employed, it is capped at the net income of the business the tips came from, and the DoorDash taxes guide shows how it works for delivery drivers.
3 differences between Schedule C deductions and other 1099 deductions
The 3 differences between Schedule C deductions and other 1099 deductions are which taxes they lower, where you claim them, and whether a loss can result.
| Difference | Schedule C deductions (entries 1 to 23) | Schedule 1 and Form 1040 deductions (entries 24 to 29) |
|---|---|---|
| Taxes they lower | Income tax and self-employment tax | Income tax only |
| Where you claim them | Schedule C, Part II, Part III, or Part V | Schedule 1, Schedule 1-A, or Form 1040 |
| Whether a loss can result | Yes, expenses above income create a loss on line 31 | No, most are capped at your profit or a dollar limit |
Dollar for dollar, a Schedule C expense saves more than a Schedule 1 deduction of the same size, and the worked numbers below show the gap. The Schedule C instructions guide covers how a business loss is reported.
What changed for 1099 deductions in 2026?
Four things changed for 1099 deductions in 2026: the mileage rate rose on July 1, the Section 179 cap rose, the QBI deduction gained a $400 minimum, and the draft Schedule C splits its interest line. Bonus depreciation stays at 100%.
| Item | 2025 | 2026 | Source |
|---|---|---|---|
| Business standard mileage rate | 70 cents a mile | 72.5 cents (Jan to Jun), 76 cents (Jul to Dec) | IRS Notice 2026-10; Announcement 2026-11 |
| Section 179 cap and phase-out start | $2,500,000; $4,000,000 | $2,560,000; $4,090,000 | Rev. Proc. 2024-40; Rev. Proc. 2025-32 |
| Bonus depreciation | 100% for property acquired after January 19, 2025 | Same | Schedule C instructions (2025); IRS IR-2026-06 |
| QBI minimum deduction | None | $400, with at least $1,000 of QBI | IRC §199A(i) |
| Line 16 interest | 16a mortgage, 16b other | Draft: 16a mortgage, 16b vehicle loan, 16c other | 2026 draft Schedule C |
What you can't deduct as a 1099 worker
You can't deduct personal costs as a 1099 worker, even when they help you work. Five come up most often:
- Commuting: Driving from home to a regular work location is personal, and driving between business stops is not.
- Federal income tax and estimated payments: These are never deductible.
- Fines and penalties: These include parking tickets and IRS penalties.
- Political contributions: These are not deductible as a business expense.
- The personal share of mixed-use costs: This means the family phone line, the personal miles, and the rest of the home.
How to keep records for 1099 deductions in 3 steps
To keep records for 1099 deductions in 3 steps, separate your business money, save proof of each expense, and write down the business share of anything you also use personally.
Step 1: Run business money through one account
Run every business payment through one bank account and one card, so your statements become your expense log. A personal purchase on the business card is then easy to spot and leave out.
Step 2: Save receipts and a dated mileage log
Save a receipt or invoice for each expense and a dated log of business miles, because the IRS asks for written records. Keep them for at least 3 years after you file, and longer in some cases, such as a year you claim a bad debt.
Step 3: Split mixed-use costs by business share
Split mixed-use costs by business share: pick a method for your phone, internet, and car, write it down once, and apply it all year.
How much does a 1099 deduction save?
A 1099 deduction saves you self-employment tax and income tax if it goes on Schedule C, and income tax only if it goes on Schedule 1. The table compares $1,000 of each for a single filer in the 22% bracket in 2026, before the QBI deduction.
| Tax saved | $1,000 of Schedule C expenses | $1,000 of health insurance on Schedule 1 |
|---|---|---|
| Self-employment tax | $141.30 | $0.00 |
| Income tax at 22% | $204.46 | $220.00 |
| Total | $345.76 | $220.00 |
The Schedule C expense cuts self-employment tax by $1,000 × 92.35% × 15.3%. Half of that, $70.65, was a Schedule 1 deduction, so your income falls by $929.35 and income tax falls on that amount.
The figures assume profit under the Social Security wage base, and the QBI deduction would trim both totals slightly. Enter your profit before and after a deduction in the Solvent Self-Employment Tax Calculator, linked below, to see the difference for your own numbers.
Solvent self-employment tax calculator
Calculate your self-employment tax
How to estimate quarterly taxes after your 1099 deductions
To estimate quarterly taxes after your 1099 deductions, subtract your expenses from what you've earned so far this year, project the full year, and pay a share of the tax each quarter. The Solvent quarterly tax estimator turns a year-to-date profit figure into a quarterly payment, so you'll know what to send before each due date.
Frequently asked questions about 1099 deductions
How can I reduce taxes on my 1099 income?
You can reduce taxes on your 1099 income by claiming every business expense on Schedule C, contributing to a SEP IRA or Solo 401(k), and paying quarterly estimated taxes so you avoid an underpayment penalty. If your profit grows, an S corp election can also lower self-employment tax, so run the numbers before you elect.
What are the 10 most overlooked tax deductions?
There is no official list of the 10 most overlooked tax deductions, and the IRS publishes no ranking. For 1099 workers, ten that are easy to miss are the home office, business mileage, half of self-employment tax, health insurance, retirement contributions, the QBI deduction, phone and internet, software, platform fees, and startup costs.
What items are 100% tax deductible?
Most business expenses are 100% tax deductible on Schedule C, including supplies, software, advertising, business insurance, and contract labor. Three common items are not: business meals are 50% deductible, business gifts are capped at $25 per person a year, and a phone or car you also use personally is deductible only for its business share.
What deduction can I claim without receipts?
No deduction can be claimed without records, but a few deductions need no receipt for each expense. Half of your self-employment tax and the QBI deduction are figured from your profit, the simplified home office method uses square footage, and the standard mileage rate needs a dated mileage log instead of gas receipts.
Can you claim 1099 deductions if you didn't get a 1099?
Yes, you can claim 1099 deductions if you didn't get a 1099, because deductions depend on your business income and expenses, not on the forms clients send. For 2026, clients send Form 1099-NEC only for $2,000 or more, so report all of your income on Schedule C and deduct your expenses against it.
About the author
Nicolas Straut
Personal and business finance writer, former Forbes contributor
Nicolas Straut writes about self-employment and quarterly tax, LLC formation and costs, and tax software for Solvent. He has written about money for about ten years, including for the fintech companies NorthOne and Fundera. He files his own taxes as a freelancer. He isn't a CPA or an enrolled agent (EA).
More articles by Nicolas Straut →Sources
- https://www.irs.gov/instructions/i1040sc
- https://www.irs.gov/instructions/i1040gi
- https://www.irs.gov/newsroom/irs-sets-2026-business-standard-mileage-rate-at-725-cents-per-mile-up-25-cents · https://www.irs.gov/pub/irs-irbs/irb26-29.pdf
- https://www.irs.gov/publications/p463
- https://www.irs.gov/publications/p583
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