@jeremyr3 wrote:
So in my instance, if I have $10,000 in sales but the cost of those goods sold to my was $9700, I claim the hobby income off $300?
The TCJA says hobby expenses are not deductible. I assume that this means paypal fees, shipping, etc are not deductible, but to calculate hobby income received I can still take sales - the cost of the goods sold?
Yes.
Despite what the other person said, you can NOT claim a hobby is a business just because it has a better tax result.
As for the 1099-K, you could just ignore it. It is possible that the IRS would send you a notice, and then you could reply back explaining the situation and showing the $300 reported as a hobby.
Or you could enter that income as a business, then "back it out" by entering an equal amount as an "other deduction" (you could call the "other deduction" something like "hobby, reported elsewhere on return"). Doing that would likely avoid the IRS notice.
