The IRS requires you report all income.
If this is Self-Employment, you will file Schedule C.
You will claim the income, but also expenses relating to earning that income.
If you use a space in your home as an office and it is where your business activity is located, (you meet clients there or you do the physical work on-site but do the bookkeeping at home in an area used strictly for this purpose), you can claim a home office using the Simplified Method which is based on square footage. You can also use actual expenses for the home office but that is a little more complicated. TurboTax will walk you through it either way.
There is no list of acceptable expenses. The IRS says they should be "ordinary and necessary" to the business.
If you bought something to use for the business, such as a computer or vehicle, enter that as an asset. Depending on the cost and percentage of business use, you will deduct depreciation for that item.
If you use TurboTax, you will need to upgrade to "Home and Business".
Another option, if you earned this income doing something that you only do to have fun, and not to make a profit, you would report that as "Hobby Income".
Hobby income is reported as Other Income (no Schedule C) is still taxed as income, but you don't pay self-Employment Tax (FICA). Additionally, you can't claim the same business expenses.
Since you're over 65, you won't be eligible for the Earned Income Credit.
Self-Employment is entered under
Wages & Income
Scroll down to self-Employment
Hobby income is entered under
Wages & Income
Less Common Income
Miscellaneous Income, 1099-A, 1099-C START
Hobby income and expenses START
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