Have a Tax Question? Ask a Tax Expert
Thank you for giving me the opportunity to assist you. I will give the best answer that I can with the information provided.
If the 1099MISC you received is for the gross amount before the severance taxes were withheld, you may deduct these on Line 16 of your Schedule E.
Severance tax is generally a tax on oil or gas royalties, and withheld from your royalties by the payer.
Deducting the tax on line 16 effectively removes this expense from your taxable income.
See instructions for Line 4: http://www.irs.gov/pub/irs-pdf/i1040se.pdf
Let me know if you need any additional information.