1099 deductions are tax-deductible expenses that can be used to reduce taxable income. A 1099 form is issued by an employer for any work done by an independent contractor of self-employed person. This form is also used to record additional payments that are included in taxable income, but are not related to earned wages. This can include car mileage or other expenses.

There are three types of 1099 deductions that can be claimed when filing your income taxes: business expenses, home office and transportation. This type of income is related to self-employment income. As such, the business expense associated with this income must be reported on a Schedule C or Form 1040. The net taxable income is the difference between your taxable income and 1099 deductions. This amount is reported on line 13 of the 1040 form.

When filing your income tax return, you are still eligible to claim all the standard deductions. This includes personal amount, age, dependents and other personal deductions. One of the benefits of working as a self employed person is the increased number of eligible deductions.

The business expenses that are eligible must all be directly related to earning the income reported on the 1099. Receipts are required for these expenses and they must be made available to the Internal Revenue Service (IRS) upon request. Common expenses include equipment, tools, and supplies.

Home office is an eligible deduction, provided that you can prove that there is a dedicated area of your home that is used at least 75% of the time for business. To calculate the amount of the office expense that can be included in 1099 deductions, use the following process. Take the total amount of square footage for your house and divide it by your total housing costs. This value is the office cost per square foot. Multiply this value by the square foot size of your office.

Keep in mind that the amount of space claimed must be deemed reasonable by an auditor. If you work requires the storage of materials or equipment in your home, add this space to the total square footage. The amount calculated is the total home office expense.

Transportation expenses are calculated in a similar fashion. Find your total transportation costs by adding up the car payment and insurance amounts for the year. Divide this by the total mileage traveled. Multiply this value by the number of business related mileage incurred during the year. It is important to keep regular records of business related travel to support this claim.