The 1099 Deduction Guide for Gig Workers

You're a business now — act like one

The moment you start earning on a 1099 — DoorDash, Uber, Instacart, freelance contracts, you name it — the IRS puts you in the same category as a small business owner. That means self-employment tax, quarterly estimated payments, and one big upside: you can deduct ordinary and necessary business expenses against your income.

Most new gig workers don't think of themselves as businesses, so they don't keep business records. That's the expensive mistake. The difference between a driver who tracks mileage all year and one who reconstructs it in April can easily be a four-figure difference in taxable income.

The big categories most gig workers can deduct

1. Mileage — usually the largest deduction

Business miles driven in your personal vehicle can generally be deducted at the IRS standard mileage rate (or via the actual-expense method). What counts: driving to pickups, between deliveries, to client sites, to buy supplies. What doesn't: commuting from home to a regular workplace. The catch — the IRS expects a contemporaneous log with date, miles, and business purpose. Reconstructed logs hold up poorly in audits.

2. Phone and data

If your phone is how you accept gigs and navigate, a business-use percentage of your phone bill and the device itself can be deductible. You can't deduct the whole bill if it's also your personal phone — you allocate a reasonable percentage and document why.

3. Supplies and equipment

Hot bags, phone mounts, chargers, insulated containers, uniforms where required — the gear you buy to do the job. Keep the receipt; a bank charge alone is weaker evidence.

4. Platform fees and commissions

Fees platforms take out of your pay before you see it, plus any service charges you pay to booking or payment apps. These often show up on your 1099 gross, so deducting them properly keeps you from paying tax on money you never received.

5. Home office — with rules

A space used regularly and exclusively for business can qualify for the home-office deduction — either the simplified rate or a percentage of actual housing costs. "Exclusive" is the word that trips people up: a desk in a shared guest room usually doesn't qualify.

6. Insurance, tolls, parking, and more

Business-portion insurance add-ons, tolls and parking while working, professional subscriptions, certifications — smaller line items that add up when they're actually captured.

What the IRS actually wants to see

Deductions aren't denied because they weren't real — they're denied because they weren't documented. The standard: a receipt or bank record for expenses, a mileage log with business purpose, and records kept close to when the expense happened. A year of scattered bank statements sorted in April is exactly the situation audits are built to punish.

That's the workflow DeductionDog was built around: capture receipts by photo or by scanning your email, detect drives automatically so the mileage log writes itself, then export the whole year as an accountant-ready package — Schedule C mapping included.

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DeductionDog provides record-keeping software, not tax advice. Deduction eligibility depends on your specific facts — when in doubt, talk to a qualified tax professional.