Yes, you are correct. In fact, this IRS publication states that expenses from hobby income are no longer deductible as a miscellaneous itemized deduction.
This would raise a red flag with the IRS if one tries to net expenses against the income.
Yes, you do need to enter your business income and expenses on a Schedule C. When you enter your Form 1099-K there is a screen that says What type of income is your 1099-K for? To which you need to respond Self-employment income. Later in that section you will see a screen that says Your self-employment 1099-K income where you can select the Schedule C you have already set up, or you can set up a new one:
After you enter the Form 1099-K, go to the self-employment income section and enter your business expenses.
Hi Thomas, thanks for your answer but it brings up a question for me. Hobby or self employment? I'm retired and got into this business to support my hobby of collecting coins. To me, I feel it's more a hobby as I don't need the income. I originally, entered it on schedule 1 but I couldn't find how to claim my expenses (buying stock, mailing cost, and fees). I didn't think taking the amount on my 1099-K, subtracting my expenses, and using that number on schedule 1 would work. It think that would trigger some IRS action because I didn't use the amount on my 1099-K
Yes, you are correct. In fact, this IRS publication states that expenses from hobby income are no longer deductible as a miscellaneous itemized deduction.
This would raise a red flag with the IRS if one tries to net expenses against the income.