I thought the expenses were going to offset the tax liability.

[Taxjunkie]

So I enter all the expenses line by line for the 1099 NEC and because the standard deduction is more than the the itemized amounts we still owe the same amount in taxes. I thought the expenses were going to offset the tax liability.

[JotikaT2]

No, expenses are only used to offset income, not actual tax liability.

For example, if you have income of $100, and expenses of $50, you still have net income of $50.  In this overly simplified example, your tax would be calculated at the tax rate that applies to that net income of $50.  If your tax rate is 10%, your tax would be $5 ($50 times 10 percent tax rate).

As far as itemized versus the standard deduction, you can only take one.  TurboTax will utilize the deduction that results in the higher tax deduction for your tax return.

Please see the attached link for additional information on the difference between the standard deduction and itemized deductions.  

Standard deduction versus itemized deduction

Standard deduction for 2020