10-99 help! I need help with deductions?

You are correct, the idea is that you would only be in business to make a profit. If it cost you money, you would quit.

If you are self-employed, you will always owe the SE tax. If you don't have children (who also cost more money than you get back), you will won't qualify for the refundable EIC and additional child tax credit which would be the only way to cover the SE tax and "get something back."

However, you may discover you can't use all of those receipts (better to save them though).

1. Gas. Expenses for driving a car can only be deducted if you kept a mileage log. You say you did.

2. Work clothes. My work clothes have ranged from blue jeans to expensive suits. NONE of them were deductible. If you can wear them to the mall or church and not stick out like an idiot, they aren't deductible. (If you have a uniform or a work shirt with the name of the business embroidered on it, that's different. Or things like steel-toed safety shoes.)

3. The phone for work is tricky. It has to be a second line and you have to show the business use there too.

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YOU NEED PROFESSIONAL HELP DOING YOUR TAXES. From what I've read you are in need. FYI: You are receiving a 1099 and this means that you are self-employed. The guy that paid you is filing the 1099 with IRS "on you" to report your income to the government. Self-employed people must file when total receipts (amounts you have received without regard to expenses or deductions) are $400 or more. You will file a 1040 long form with a Schedule C (don't use C-EZ) and a SE (self-employment tax). Schedule C is where your 1099 income goes along with the related expenses. Mileage maybe a good expense for you. When you go in to get your return prepared you need to know how many miles you drove your car in 2009 and how many miles were related to your job. You might ask your neighbor if you can occasionally use his wireless internet connection and see if he'll set you up with a password. If he discovers and fixes this himself you'll be cut-off. We are sheep living in a land controlled by lions; don't mess with the King or you'll be eaten alive. The line above is a warning- don't write smart-assed comments on your tax return if you know what's good for you. I know of a guy that thought there was nothing they could do about it. WRONG

You can deduct the costs of running your business. To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your business.

Capital expenses, your normally depreciate. You can deduct capital expenses under section 179 deduction up to a certain limit.

It is always better to have a separate account (and even credit card) for your business. So you keep your personal and business expenses separate.

You are self employed or independent contractor. You will report your income and expenses on schedule C or C-EZ (Form 1040). This income is subject to SE tax at 15.3%. Read about self employed (or independent contractor) tax filing and payment of estimated taxes: http://taxipay.blogspot.com/2008/04/tax-filing-by-...

Have a real CPA do your taxes or use Turbo tax.