Can I Claim Deductions for Business Expenses as a 1099-MISC Contractor?

I've been working as a personal assistant for a private client alongside my main job. My client just gave me a 1099-MISC for the income I earned last year but reported it in box 3. The problem is, I've been keeping detailed records of all my business expenses as he instructed - I drove approximately 20k miles doing errands and tasks for him, paid for multiple oil changes, extra fuel costs, and even had to purchase a new set of tires due to all the driving. When I went to file my taxes, the preparer told me I can't deduct ANY of these expenses because the income was reported in box 3 of the 1099-MISC instead of somewhere else. Now I'm facing a massive tax bill that I wasn't expecting. This doesn't seem right to me at all - these were legitimate business expenses directly related to the work I performed. Is the tax preparer correct about this? Can I really not deduct any of the mileage or maintenance expenses that were directly related to this work? The amount of driving I did for this job was substantial, and it seems unfair that I'd have to eat all those costs while still paying taxes on the full amount.

0 coins

18 comments

Isabella Costa

•8M

The tax preparer isn't giving you the full picture here. The box where income is reported on a 1099-MISC doesn't automatically determine whether you can take deductions or not. What matters is the nature of your work relationship. Based on what you've described, you're working as an independent contractor (not an employee), which means you should report this income on Schedule C (Profit or Loss from Business). On Schedule C, you can absolutely deduct legitimate business expenses including mileage (which is currently 65.5 cents per mile for 2025), vehicle maintenance related to business use, and other necessary business expenses. Box 3 on a 1099-MISC is for "Other income" which sometimes confuses tax preparers, but this doesn't change your status as a self-employed contractor. Your client probably should have used a 1099-NEC instead, which is specifically for nonemployee compensation, but that's their error - not yours. I'd suggest either talking to a different tax preparer who understands self-employment taxes better or using good tax software that walks you through Schedule C properly. With 20k business miles alone, you're looking at a deduction of around $13,100 just for mileage!

0 coins

Isabella Costa

•8M

You absolutely can still claim your legitimate business expenses regardless of which box your client used on the 1099-MISC. The form they used doesn't change the fundamental nature of your working relationship as an independent contractor. You don't need to get a corrected 1099 from your client. When you file your tax return, you'll report the income on Schedule C and then deduct your qualified business expenses on the same form. The IRS looks at the actual circumstances of your work arrangement, not just which box was checked on a form.

0 coins

Freya Christensen

•8M

After struggling with a similar situation last year, I discovered taxr.ai (https://taxr.ai) and it completely changed how I handle my contractor taxes. I do delivery driving as a side gig and got a 1099 with income in the wrong box too. The taxr.ai system analyzed my tax documents, identified that I could still claim all my legitimate business expenses on Schedule C regardless of which box was used on the 1099, and walked me through exactly how to categorize everything properly. It even helped me discover several deductions I didn't know I could claim, like a portion of my phone bill since I use it for work. Their document analysis tool flagged several issues with how my client had filled out my 1099, but showed me how to file correctly anyway without needing the client to reissue anything. Saved me thousands in what would have been unnecessary taxes.

0 coins

Freya Christensen

•8M

It works alongside whatever tax software you're already using. You can upload your TurboTax file or get guidance on the specific forms you need to fill out correctly. It's more about analyzing your specific documents and situation than replacing your tax software entirely. I've found it handles complex scenarios really well. I had a mix of W-2 income, 1099-MISC with box 3 income like yours, and even some 1099-K payments from platform work. It breaks down how to report each type properly, which deductions apply to which income sources, and flags potential audit triggers before you file. The analysis is specific to your actual documents rather than generic advice.

0 coins

Chloe Davis

•8M

I just wanted to follow up about taxr.ai after I tried it - I'm shocked at how helpful it was. After being skeptical in my last comment, I decided to give it a shot with my complicated tax situation (multiple 1099s with income in different boxes plus W2 income). The document analysis immediately identified that I could file all my 1099 income on Schedule C regardless of which box it was reported in, and it showed me exactly how to separate my business expenses by category. I was able to legitimately deduct about 18,000 miles of business driving that my previous tax preparer had completely missed! The system also found documentation issues with two of my 1099s that could have caused problems if I'd been audited. Instead of paying nearly $4,300 extra in taxes, I ended up with a much more reasonable tax bill. Definitely keeping this service for next year.

0 coins

AstroAlpha

•8M

For those dealing with 1099 issues like this, I was in a similar situation and desperately needed to talk to the IRS to confirm how to handle it. After spending DAYS trying to get through their phone lines (literally 4-5 hours on hold only to get disconnected), I found Claimyr (https://claimyr.com). Their service actually got me connected to an IRS agent in about 15 minutes instead of the hours I was waiting before. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The IRS agent confirmed that I could absolutely claim my business expenses on Schedule C regardless of which box my client used on the 1099-MISC, and even helped me understand exactly how to report it. They basically call the IRS for you and when they reach an agent, they call you and connect you. Saved me hours of hold music and frustration, and I got the official answer straight from the IRS which gave me confidence to claim the deductions my tax preparer initially said I couldn't take.

0 coins

AstroAlpha

•8M

They use a combination of technology and timing to navigate the IRS phone system more efficiently. They have systems that autodial and can detect when lines are less busy, plus they know which phone trees and options are most likely to get through to an actual person. It's not special access, just smart routing and persistent technology. They're basically doing what big accounting firms do with their professional lines, but making it accessible to regular taxpayers. No magic involved - just efficient technology that keeps trying optimal paths until they get through. Then when they reach a human, they immediately connect you so you can speak directly to the IRS agent yourself.

0 coins

Anastasia Smirnova

•8M

I need to publicly eat my words about Claimyr. After leaving that skeptical comment, I was still desperate enough to try it because I needed to resolve a similar 1099-MISC situation. I honestly couldn't believe it when I got a call back in about 20 minutes saying they had an IRS agent on the line ready to talk to me. The agent confirmed everything mentioned in this thread - that I could absolutely claim my business expenses on Schedule C despite my client using box 3 on the 1099-MISC. She even explained that this is a common confusion and walked me through exactly how to report it properly. What would have been a $3,400 additional tax bill turned into a much more reasonable situation once I properly deducted my legitimate business expenses. I've literally never been able to reach the IRS before despite countless attempts, so this was pretty mind-blowing.

0 coins

Sean O'Brien

•8M

Just wanted to add - I'm a tax preparer (not the one who gave you bad advice), and what others have said is correct. Box 3 income on a 1099-MISC CAN absolutely be reported on Schedule C if you're providing services as an independent contractor, which clearly you are. Your client technically should have used a 1099-NEC for nonemployee compensation rather than a 1099-MISC with box 3, but that's THEIR error, not yours. You still report it on Schedule C and take all legitimate business deductions. With 20k miles, at the current 2025 mileage rate of 65.5 cents per mile, that's a $13,100 deduction right there! Find a different tax preparer who understands self-employment tax returns better.

0 coins

Sean O'Brien

•8M

If you use the standard mileage rate (which is typically the better option with high mileage like yours), that rate is designed to cover all costs of operating your vehicle including depreciation, maintenance, repairs, tires, gas, oil, and insurance. So no, you cannot separately deduct the cost of tires in addition to taking the standard mileage rate. However, you can still deduct other legitimate business expenses that aren't related to your vehicle operation, such as business supplies, a portion of your cell phone bill if used for business, business insurance, or any other ordinary and necessary business expenses.

0 coins