You are probably getting the Earned Income Tax Credit (EITC), which increases your refund as you earn more, and then starts to decrease as you earn even more than that (think of a bell curve). So in some cases MORE income equals more EITC, and in other cases LESS income equals more EITC. So you might actually be better off claiming less expenses against your 1099. The second thing is that you likely paying self-employment tax on your 1099 income...i.e. the FICA taxes that are on a W2.
