If it is not a major portion of your income- such as selling the occasional piece- then it is a hobby. They want you to report the income (if you were paid less than $600 it may not have been reported- they are required to report anything over that amount). You can deduct hobby expenses up to the income from the hobby (it is possible to deduct more if you declare it a business) and claim a loss (as I remember you can claim a loss two out of three years and still be consider it business).
A bit more info:
http://www.ehow.com/how_2183916_hobb...by-income.html