Contract work - what is deductible?

The $60 per diem, or $120 per week for 6 weeks, will get added to the
1099-MISC.  Or at it least it should be.


You can only deduct mileage from your regular place of business to a
customer site.  So if you can establish a home office and you actually
do your "main" work from there, then you can deduct the mileage.  Main
work is an ambiguous term.  It could mean most of the work, or
administrative work (while you meet clients out of the home or at
their place of operation, like a plumber who works 1 hour in the home,
and 7 hours out of the home).  I think you can even have a home office
and go to a client's site for a few weeks.

I'm not sure if your situation will meet this description.  But maybe
you can make it work.  If you do other contract work out of your home,
then that's an easy way to do it.


As long as you have a home office you can deduct motel costs, meals
and entertainment (although only half of it is deductible).  Other
things you deduct are business license, office supplies, postage
stamps.

Remember, SE tax is about 15.3% of your income after expenses.  It's a
lot of money, so don't be surprised at the end of the year.

You can deduct your personal health insurance as well, but only up to
your income.

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