1099 business expenses (Schedule C)
The rule (settled)
As a 1099 contractor (PRN-as-contractor or legal nurse consulting), you can deduct ordinary and necessary business expenses on Schedule C (Pub 334). Common ones:
- License renewals
- Malpractice insurance
- CEUs that maintain or improve your current skills
- Certifications
- The business share of your phone and internet
- Software
- Professional dues
- Supplies
- Business mileage
- Tax preparation for the business part of your return
- Travel away from your tax home: lodging, transportation, and 50% of meals
Pub 535 was discontinued after 2022. Its content now lives in Pub 334, 463, 587, 946, and Form 7206.
Scrubs and uniforms
Deductible only if required and not suitable for everyday wear. This is an objective test, from Pevsner v. Commissioner, 628 F.2d 467 (5th Cir. 1980), and the 5th Circuit includes Texas. Gray area: plain scrubs that could be worn as street clothes.
Education
Must maintain or improve skills in your existing 1099 business. Courses that qualify you for a new trade aren't deductible. Costs before your LNC business starts may be start-up costs. Ask your CPA.
1099-NEC
For payments made in 2026, clients file a 1099-NEC at $2,000 or more. Report all 1099 income whether or not a form arrives.
First, the classification question (gray area)
Whether a PRN nurse placed by an agency is truly an independent contractor depends on behavioral control, financial control, and the relationship. Taking a 1099 for work that looks like employment can cost you the employer's FICA share, overtime, and the overtime deduction. See IRS "Independent contractor or employee?" and Form SS-8. Legal nurse consulting / chart review for law firms is much more clearly self-employment.
More from the research
- Phone / internet: business-use share only. Keep a reasonable allocation method (e.g., a sample month). (Pub 334)
- Equipment (laptop, monitor): expense or depreciate; OBBBA restored 100% bonus depreciation for property acquired after Jan 19, 2025. (Pub 463 (2025) "What's New"; Pub 946)
- Self-employed health insurance: above the line, but not for any month you were eligible for a subsidized employer plan (yours or your spouse's). (IRC §162(l)(2)(B); Form 7206)
Common mistakes
- Deducting expenses the agency already reimbursedDouble benefit, not allowedSource: Pub 463 ch. 6
Watch: W-2 vs. 1099: what changes
Transcript
- A W-2 job and a 1099 job at the same hourly rate are taxed differently.
- W-2 mileage, scrubs, license renewals, and CEUs aren't deductible. Ask for reimbursement under an accountable plan instead.
- 1099 work opens Schedule C deductions, the 20% QBI deduction, and a SEP-IRA or Solo 401(k).
- But it adds self-employment tax: 15.3% on 92.35% of net profit, about 14.13% of profit.
- Example with made-up numbers: at the same $55 an hour, the 1099 offer took home about $925 less.
- Research, not tax advice. Confirm with a CPA or EA before filing.
What to keep
- Separate bank account and card for the 1099 businessFrom: Nurse tax brief §5
- Receipts or invoices: licenses, CEUs, certifications, insurance, software, equipmentFrom: Nurse tax brief §5
- Phone/internet business-use calculationFrom: Nurse tax brief §5
- 1099-NEC/1099-K forms, plus your own income ledgerFrom: Nurse tax brief §5
Sources
- Pub 334 (2025), Tax Guide for Small Businesshttps://www.irs.gov/pub/irs-pdf/p334.pdf
- IRS guide to business expense resourceshttps://www.irs.gov/forms-pubs/guide-to-business-expense-resources
- Pub 529 (Rev. Dec 2020)https://www.irs.gov/pub/irs-pdf/p529.pdf
- IRS: Independent contractor or employee?https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee
Research, not tax advice. Confirm with a CPA or EA before filing.