"Beginning in 2018, the IRS doesn't allow you to deduct hobby expenses from hobby income, you must claim all hobby income and are not permitted to reduce that income by any expenses."
Above wording comes from this article: https://turbotax.intuit.com/tax-tips/self-employment-taxes/4-tax-tips-for-money-making-hobbies/L89qz...
What is the definition of "income" as used in the quotation above? Is it gross receipts, gross profit, or something else? Lets use the below circumstance to get into the numbers:
I do woodworking as a hobby. I build a birdhouse and sell it for $25. The wood, glue and paint used to make it cost me $15. I also needed to use my tools and shop which incurred some wear and tear. The sale involves communication over my cell phone and use of my data plan which have monthly fees. I am married filing jointly and take the standard deduction. What is the proper way and correct amounts to report on my tax return?
