Understanding Form 1099 in the USA: Which Expenses Can Independent Contractors Deduct?

In the United States, if you earn more than $600 in a year through apps like Uber, Lyft, or DoorDash, you will receive a Form 1099-NEC or 1099-K. This means the IRS classifies you as self-employed.

In addition to regular income tax, you must pay Self-Employment Tax, which is roughly 15.3% to cover Social Security and Medicare. To lower your tax bill legally, take full advantage of the Standard Mileage Deduction. Every business mile driven while picking up passengers or delivering orders reduces your taxable income. You can also deduct insulated delivery bags, phone mounts, car washes, and the business percentage of your cell phone plan. Remember to submit quarterly estimated taxes four times a year to avoid late penalties.