I have a 1099-MISC for $1193, can i claim half or more in expenses? I was figuring about 600. Too much/little?

Question

I only worked for a few months...I figure I could claim my cell and subway travel for these months...and internet at home. i just dont want to claim too much and look suspicious...or can i claim more? Any formula?

Answer 1

You can only claim the legitimate business expenses, whatever they are.

Commuting costs are never deductible. The first trip out at the beginning of the day and the last trip home at the end of the day are commuting and are not deductible. Travel between client sites during the day is deductible, though

The portion of the cell phone bill and internet bill attributable to the business is legitimate. Be prepared to prove your numbers.

Answer 2

In general, your thoughts are not overly aggressive. In addition to Mr. Boston's expense suggestions, I would add this: There are numerous expenses that you may have incurred in pursuing your Misc. Form 1099 income. The best way to include these costs is to include Form C-EZ in your return. The bottom line from this form is carried forward to page 1 on your Form 1040 as income from a business (a "home-based" business in your case). On Form C-EZ put your 1099-Misc. in the "gross receipts" section.

The form will allow for numerous expenses including reasonable office space for your Home-Based Business. That's your desk area with computer, filing cabinet, and telephone. TaxCut or TurboTax will help you set that up. Other items you can include would be reasonable lunch costs where you did business or looked for prospects. I don't believe you need receipts for a lunch under $75, but you need some form of diary. Who? What business? Communications expenses would include a portion of your cell phone, Internet DSL, stamps and any UPS or FedEx receipts related to your 1099 income.

Certain items beg for scrutiny and I would leave them out. Subway fares or passes are an example. Leave them out.