Are they asking for gross income or net income? Gross
In another section there will be an opportunity for me to input all the expenses such as cost of goods, shipping and postage, site fees. Yes, you can either choose to keep an inventory or enter the goods as supplies. If you choose inventory, then shipping in to you is part of cost of goods sold. Shipping out is an expense. Ideally you kept track of all you expenditures. If anything doesn't have a category, you can enter it as miscellaneous with an explanation.
but the amount I owe is quite a lot. You not only pay Federal tax on the income but also Social Security and Medicare taxes. Since you are not an employee, there is no one to withhold these taxes. You pay 100% of them yourself.
