I made money on etsy this past year. Can I not deduct all the supplies I bought to make those items?

[DawnC]

Yes, you can deduct your expenses related to your self-employment income.   To deduct expenses, you will need to use TurboTax Self-Employed or the desktop version of TurboTax.   

How do I report Self-Employment Expenses?

[fanfare]

there's a difference between supplies (like envelopes packaging )

and materials for the product.

you can only deduct the cost of materials that went into the products you sold.

Supplies are a separate line item.

@dlabelle112 

[ee-ea]

Are taxpayers required by law to claim all expenses pertaining to their business?

Yes. A self-employed individual is required to report all income and deduct all expenses. Revenue Ruling 56-407, 1956-2 C.B. 564, deals with the issue of taxpayers not taking all allowable deductions in computing net earnings from self-employment for self-employment tax purposes. Rev. Rul. 56-407 held that under §1402(a), every taxpayer (with the exception of certain farm operators) must claim all allowable deductions in computing net earnings from self-employment for self-employment tax purposes.

From https://www.eitc.irs.gov/tax-preparer-toolkit/frequently-asked-questions/earned-income-self-employme...