As a freelance designer, all of my income is 1099, and I navigate offsetting the “profit” with every expense I can find. I keep receipts for absolutely everything that I can conceivably say was an expense( gas, meals, soft/ hardware etc). It’s a business and that’s what I have to do.
What’s interesting is the way the new $600 reporting threshold in essence turns our hobbies into businesses. Previously, unless serious money was moving around, the gov would have no real insight into your hobby buying and selling. Sure you probably made some money on a game sale, but it also probably shook out with the countless other purchases and upkeep over time.
Now, if I sell games and parts that I’ve had for years, and receive payment with a cash app, the gov is getting the 1099 showing that, and the onus of proof of profit/ loss is on me, regardless if I kept track of purchase prices, gas, parts, maintenance and every other expense involved with owning and enjoying the item. Without treating it as a business and keeping perfect records, it’s nearly impossible to offset the sale price in a way that an auditor would approve.
This reporting can currently be sidestepped by just doing cash on glass. That is, unless you then deposit the money into your bank account while also having more than $10k in non-payroll deposits over the course of the year. As soon as you meet the $10k in deposits threshold, the same bill that is mandating the cash app reporting is also mandating your bank to report your deposit and withdrawal amounts to the IRS. This reporting threshold was originally $600, but was walked back to $10k after pressure.
Moral of the story, your hobby is now a business whether you like it or not.