The W2 income is employee income and that is reported as such.
The 1099s that you receive for working as a free lancer are considered self employment income.
Any self employment income gets reported on Schedule C. You can take any expenses that are ordinary and necessary in the course of your business on Schedule C. Therefore, the computer purchase can be taken as a deduction on Schedule C against your self employment income. You can either write off the computer in the current year to maximize tax savings for just this year or you can depreciate it over 5 years and take smaller tax savings for 5 years.
