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@user3143.   Unfortunately for people who earn income from hobbies, the Tax Cut and Jobs Act (which went into effect in 2018) completely eliminates the itemized deduction for hobby expenses, along with all other miscellaneous itemized deductions. The prohibition on deducting these expenses continues through 2025. This means that taxpayers will not be able to deduct any expenses they earn from hobbies through at least 2025, but they still have to report and pay tax on any income they earn from a hobby.  The deduction is scheduled to return in 2026.

While it may seem to “make sense” to offset the deductions from a hobby directly against the income from that hobby, in effect to "zero out" the hobby income and the tax associated with that hobby income, that is not the proper treatment.  Because this is the case, it is likely the reason why when you entered your hobby income and hobby expenses (and those expenses are no longer deductible) that you saw your tax liability increase and your tax refund decrease.  

In the future, if your hobby eventually turns into a business, you would have more options available to you in terms of expenses, and deducting those expenses from your profits.  Below is an IRS webpage that addresses hobby income and the factors the IRS uses to determine if someone is engaged in a hobby or a business.  You might find this information helpful.  

What Taxpayers Need to Know About Paying Taxes on Hobby Activities

[February 8, 2022 at 12:46 PST]  

After further review of your question, we felt it appropriate to add to our initial response with the following information relating to the sale of personal use property and the sale of personal property.

In your question, you indicated that you had sold items on eBay.  If the items you sold on eBay were personal use property, then the income you earned may not be taxable.  Personal use property is whatever you own and use without the primary intent to profit from its sale.  For example, the clothes you wear, the food in your pantry, and your cellphone all constitute personal use property.  You probably purchased these items not intending to sell them for a profit.  Rather, you most likely purchased them to use (i.e., personal use) and selling them was more of an afterthought.  Personal use property can’t be used for business or rental purposes.

When you sell personal use property, you cannot claim a deduction due to losses from the sale of such property.  However, if you sell your personal use property for a gain, then you are liable to pay taxes on that gain.  Thus, it is important to have documentation showing the cost for any personal use property that you sold through eBay.  If you know the cost, then you will know whether you had a gain.  If you sold your personal use property at a loss or at cost, you would not be able to deduct that loss, but you would not owe any tax on the income you received. 

Check to see whether any of the items you sold on eBay qualify as personal use property.  If they do, and you did not sell them at a price greater than your cost, then the income you received is not taxable and you can remove such items from your return.  Keep any records of your sales through eBay including records showing the cost of such items.

Personal property is different from personal use property.  Personal property is property that was purchased with the primary intent to profit from its sale.  Some common examples of personal property would be stocks and bonds, to lesser-known property, like art and collectibles. Land can be an example of an investment property as well. 

If any of the items you sold was personal property, that is property you purchased with the intent to sell it at a profit, then you would pay tax on any gain from the sale.  If you had a loss, the loss would generally be deductible and could be used to offset any other capital gains and even some of your ordinary income.   

Therefore, determining whether the items you sold through eBay are personal use property or personal property is important.  Once you have the correct category for each item (some of them might be personal use whereas others might be just personal property), and when you know the cost for each item, then you will know whether you have any gain, and whether you will need to pay tax on the income received.