Yes, all income needs to be reported, even if it's from a hobby.
The IRS doesn't allow you to deduct hobby expenses from hobby income, but you can deduct the costs involved in creating the hobby income. You can determine gross income from any not-for-profit activity by subtracting the cost of goods sold from your gross receipts.
Follow these steps to enter your hobby income in TurboTax.
- Sign in to TurboTax and open your return
- Select Search and enter 1099-k
- Select Jump to 1099-k
- Select Yes on the Did you get a 1099-K? screen
- Select Hobby income and Continue
- On the next screen, enter the details from your 1099-K regarding who paid you, their federal ID number, and the amount in Boxes 1 and 4. If your form has information in boxes 6-8, select the box and enter those details, and Continue
- If you have a 1099-K from another hobby, select Add another 1099-K, otherwise, select Done
- Scroll down the Wages and Income page and select Less Common Income
- Select Start next to Miscellaneous Income, 1099-A, 1099-C
- Scroll down to Other reportable income and select Start
- Choose Yes on the Any Other Taxable Income? screen
- In the Description field, enter Form 1099-K Costs of Goods Sold
- In the Amount field, enter your Costs of Goods Sold as a negative number, select Continue and then Done