Yes, all income needs to be reported, even if it's from a hobby.

The IRS doesn't allow you to deduct hobby expenses from hobby income, but you can deduct the costs involved in creating the hobby income. You can determine gross income from any not-for-profit activity by subtracting the cost of goods sold from your gross receipts.

Example: Jill works for ABC Marketing Company doing marketing activities. That’s how she pays her bills. In her spare time, she makes fairy houses. She posted a picture on her social media account and someone wanted to buy one. She made $650 selling one of her creations and received a 1099-K.  Jill had paid $50 for materials to create the fairy house, $20 photographing the fairy house and $10 shipping it after it was sold.  Jill cannot deduct the expenses for photographing or shipping the fairy house, however she can deduct the $50 cost of creating the fairy house.

Follow these steps to enter your hobby income in TurboTax.

1. Sign in to TurboTax and open your return
2. Select Search and enter 1099-k
3. Select Jump to 1099-k
4. Select Yes on the Did you get a 1099-K? screen
5. Select Hobby income and Continue
6. On the next screen, enter the details from your 1099-K regarding who paid you, their federal ID number, and the amount in Boxes 1 and 4. If your form has information in boxes 6-8, select the box and enter those details, and Continue
7. If you have a 1099-K from another hobby, select Add another 1099-K, otherwise, select Done
8. Scroll down the Wages and Income page and select Less Common Income
9. Select Start next to Miscellaneous Income, 1099-A, 1099-C
10. Scroll down to Other reportable income and select Start 
11. Choose Yes on the Any Other Taxable Income?screen
12. In the Description field, enter Form 1099-K Costs of Goods Sold
13. In the Amount field, enter your Costs of Goods Sold as a negative number, select Continue and then Done