There is a big difference in how the expenses are reported and the amount of expense you can actually deduct.
The first method reports business income and expenses on Schedule C. On Schedule C, you are able to take your expenses directly from income (with some exceptions for items that need to be depreciated and certain limits) and you only pay tax on the remaining net profit.
Reporting in the Deductions and Credits section under employee business expenses is for W2 employees. Here you report all of your W2 income and then you can possibly deduct some of your expenses on Schedule A as an itemized deduction. In order to deduct any expenses, the total expenses must exceed 2% of your adjusted gross income before they are even deductible as itemized deductions. And, even then, you would need to have more total itemized deductions than the standard deduction in order to see tax benefits. There are also stricter limits to the types of expenses you can deduct.
If you are self-employed and/or receive Form 1099-MISC, then you should be using the first option and report your income and expenses on Schedule C. It is the proper reporting method for those filers and it will lead to a greater tax savings.
