What Can Be Written Off On Tax Form 1099?

Deduct the costs of earning the amount on Form 1099 to determine taxable income.

When you receive a Form 1099 indicating income to report on your tax return, deductions are usually available before calculating the tax. Any expenses incurred to earn the income are tax deductible.

Nonemployee Compensation

Most recipients of a 1099 have an amount reported in the form's box for nonemployee compensation. This includes fees, commissions, prizes and awards.

Commissions and fees are business income. Therefore, business expenses are deductible.

Deductible business expenses are the ordinary and necessary costs incurred to earn the income.

If you drive your vehicle to a location for earning the 1099 income, a simplified method for deducting business use is determined by a standard amount per mile.

Rents

Form 1099 also reports rents you received. Expenses associated with renting your property are deductible.

Rental expenses include maintenance, repairs, insurance, advertising, property taxes, interest and depreciation.

Another deduction is vehicle mileage for travel related to the rental activity.

Royalties

Royalties are reported on Form 1099 if you have an economic interest in natural resources.

You are entitled to a deduction for depletion when you have an interest in mineral property or standing timber. Depletion is determined because of reduced value for your economic interest caused by resource extraction.

References

• IRS: A Guide to Information Returns
• IRS: Business Expenses
• IRS: Publication 527
• IRS: Publication 535