I've done quite a bit of consulting (i.e. 1099). You are right that the taxation is terrible. In my case I'm lucky to keep even 50% of the income.
My rules of freelance work are (1) to dare to charge way more than you think your client will pay, (2) to turn down work that, even then, is not both easy and lucrative, and (3) to "fire" any clients that don't respect you, your time, or who fail to pay promptly.
Rule 1 will actually help gain the respect of your client. "You get what you pay for" will work in your favor. Rules 2 and 3 are a matter of self-respect for your own time, given that you have a full time job. You have to avoid thinking only about the money. That can be nice, but free-lance work can and will kill your free time and your relationships unless you are able to say no.
Next, Section 179 is a boon to the self-employed. You can write off virtually any business related purchases 100%, immediately in the year you bought it (there is a cap, but it's rather high). This means that if you need a new desk, chair, table lamp, etc., or a new computer, etc., it costs you only about half of what you pay (after the tax deduction). Use this aggressively!
I'd be much more conservative about the home office deduction, however, since traditionally the IRS has always viewed that as a potential red flag.
Finally, you should definitely open an SEP (Simplified Employee Pension) account. It's a super-charged IRA for the self employed. It's very, very easy to open and to manage, and it's not too late to open one for last year. You can look into the 401k option as well, but it's a little more complicated and it may cost more to manage. There are pros and cons to each.