It depends. The question is whether you are operating a business or a hobby. In general, hobby income is considered as such because you're not really trying to make money, but you do get some at craft shows and similar events. Hobby income is not subject to self-employment tax (which is for Social Security and Medicare) because it is a type of casual income. However, your deductions and expenses against hobby income are limited (itemized deductions only, and only up to the amount of hobby income you earned).
A business is established for the purpose of making income. Gain is liable to self-employment and regular income tax, but it is possible to claim deductions that can even result in a loss, which does get deducted from your other income.
If you choose to claim this income as a business, you will use Schedule C (which can be accessed by clicking on the Search box with the magnifying glass, type "Schedule C" and click on "Jump to Schedule C".) You do not need to enter anything in the 1099 screens, but rather the amount of cash, checks, etc. that you received, and then continue to answer questions about your expenses.
If you choose to claim this income as a hobby (if you qualify to do so), you will enter the income in on Line 21. This can be accessed in the "Other income" screen.
For more information on this, please see the following website (click on link):
Hobby or Business? IRS Offers Tips to Decide
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