Hi cipra90,
For online sellers, this is self employment, and you report ALL business income (1099-Misc, 1099-K, 1099-NEC, cash, checks, PayPal etc.), and all directly business expenses of making that income in Schedule C, Profit or Loss From Business.
https://www.irs.gov/pub/irs-pdf/f1040sc.pdf
https://www.irs.gov/pub/irs-pdf/i1040sc.pdf
Therefore, 1099s are only part of your business revenue. Schedule C, part I Income, line 1 Gross receipts or sales should always larger than or equal to the 1099s you received.
Schedule C, Part III Costs of Goods Sold, you enter the direct purchase/cost of items or materials that are been resold.
Part II expenses are administrative expenses, indirect costs, i.e. you still incur these costs regardless selling any items.
Schedule C is self-reporting of business operating results, in case of IRS inquiry, you should be able to support the numbers entered on the schedule. You do not submit receipts to IRS when filing initial tax return.
Below article FYI.
Top Five Ways to Avoid a Tax Audit.
https://turbotax.intuit.com/tax-tips/tax-planning-and-checklists/top-five-ways-to-avoid-a-tax-audit/...
Hope this helps. Thank you.
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