Yes, you
have to report all your income shown on 1099-K. This reporting is required by law.
However, every business has operating expenses, and a sole proprietorship is no different. As long as your expenses are
"ordinary and necessary," in the parlance of the Internal Revenue Service, you can claim them on your tax return.
Of course, you have to retain any invoices, credit card statements, etc., to prove that the business expenses you have claimed are legitimate. But you don't have to present them just to prepare and file your tax return. You are required to have them if you are ever questioned or audited by the IRS.
