1099k and Kickstarter Funds

I ran a Kickstarter last year that fully funded and I received $6,701. I then took that money and put it directly into the production of the game I made which ultimately cost $7,391. If I take that money and put it directly into the production of goods, isnt that an expense I can write off? Where would I put that?

I entered in all the advertising and the consultant expenses that came to be about $3,000, but it is saying that I still have taxable income of about $3,600.

Any help would be appreciated.

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