To expand on the information shared by Opus17, if your Schedule C business income is not being reduced by $200 when you claim $200 of supplies or miscellaneous business expense, then you may be doing something wrong.
Schedule C reports all of your business income ($1000 from your example) and all of your business expenses ($200 from your example, if you actually spent $200 on the supplies). This would result in a total income for the Schedule C business of $800. The $800 is the number used to calculate the self-employment tax and it is added to any other income reported on your return to calculate your taxable income for income tax.
If you charged the customer $200 for supplies, but only had to spend $150, then your business income will be $50 higher than expected because your expenses were lower.
My suggestion is that you work on your return using a simple example like you shared and see how the Schedule C income and your taxable income changes as you add your actual expenses. You may need to 'preview your Form 1040' in order to see the interaction.
How do I preview my TurboTax Online return before filing?
@JustDucky923
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
