If this is a hobby you can report the income and then deduct any actual expenses that are ordinary and necessary for you to receive and keep the products to the extent of the income value. These expenses could be used as an itemized deduction for any amount that exceeds 2% of your adjusted gross income (AGI). The difference would be added to other itemized deductions so that TurboTax could maximize your deduction.
Whether the expenses are used on itemized deductions or whether you use the standard deduction the income must be added to the return.
To record your hobby income and deductions you can follow the steps here.
- Sign into your TurboTax account -
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Search hobby income in the upper right
- Then Jump to hobby income, loss
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Enter your income and expenses
- TurboTax will calculate your allowable expense and total itemized deductions
Be sure to add all itemized deductions to maximize the hobby expenses.
If you decide that this is more of a business, for which you plan to profit you could utilize the business Schedule C. It's all right if you aren't quite sure yet. You can always report it as a business if you find it becomes more than a hobby later.
Either way you TurboTax will help you get the most beneficial results. The IRS does not allow this to be reported on a Form 1040EZ or 1040A. It's more complicated than the short form. TurboTax Self Employed online will work for this.
If you want to record it like as a business, instead of a hobby and use the expenses you can use TurboTax Self Employed.
You can go directly to the area to enter the document by following these steps.
- Sign into your TurboTax account -
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Search schedule c in the upper right
- Then Jump to schedule c
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Enter your income and expenses
