I got a 1099K from PayPal for 2024. I sold $5400 of quilting supplies / fabric / quilt tops in Jan & Feb. I thought I might want to start a side business, but decided against it, and didn't sell anything else for remainder of the year. I have tons of receipts that I have kept throughout the years that shows the cost of the fabric and supplies that I bought to make these items.. (1) Is this considered a hobby? (2) Can I deduct any of these expenses (cost of goods) to offset the tax implications of the $5400? I understand that I cannot write off all the shipping charges nor the PayPal fees if this is a hobby (which sucks because if they took those out, I would have been under the $5K threshold for getting a 1099K)...
