The Etsy Blog

Taxes 101 for Etsy Sellers

Etsy.com handmade and vintage goods

ljmesser

Laura Messerschmitt works for Outright, a free online bookkeeping tool that imports your data in one place. The following information applies only to US sellers, and Outright is providing this post for informational use only. For specific advice, talk to an expert in your area.

When starting your first business, taxes are usually the last thing on your mind. But when tax time does crop up, suddenly you experience a mountain of worries: Am I doing it right? What kinds of taxes do I need to pay?

Never fear. This is the simple tax guide you need to understand what taxes you owe, when you owe them, and how to calculate them. If you read this advice, you’ll be able to rest easy knowing that taxes for your Etsy shop aren’t as scary as you might think.

Annual Income Taxes — Due April 15

We’ll start with the big bugaboo and the tax you’re probably already quite familiar with — annual income tax. Annual income tax is simply a tax on any income you’ve made — it’s what you’ve been filing and paying since you became an independent adult. 

Etsy sellers also have to pay income taxes on their Etsy sales; the only difference is that this is considered “self-employment income,” and Etsy sellers must fill out a form Schedule C “Profit of Loss from Business.” Don’t let the term “business” fool you — you must file Schedule C even if you’re a sole proprietor and haven’t registered your business as a corporation.

Portlandians showed their colors at Outright’s presentation on The Lowdown on Taxes for Etsy Sellers on January 20, 2013. (Photo by Holly MarshMueller)

You owe taxes on the net profit from your business — that is, the total amount of income you made, minus your business expenses. The amount you pay increases as your Etsy business’s net profit increases. Outright will help you calculate how much you owe, including the self-employment tax and social security taxes you’re responsible for as a self-employed person.

One important thing to note is that the United States has a “pay-as-you-go” income tax — meaning that you’re supposed to pay your income taxes as you earn money, not just at the end of the year. This is why an employer takes taxes out of each paycheck for their employees. Self-employed people are also required to “pay as you go,” but the responsibility for remitting taxes to the IRS and state government taxing body is solely theirs. Self-employed people are required to pay these “pay as you go” taxes quarterly, which brings us to…

Quarterly Estimated Taxes — Due Quarterly

To put it simply, if you have a business and you’re expecting to owe more than $1,000 in taxes for the year, the IRS expects you to pay a fourth of the tax you owe each quarter. Quarterly estimated tax due dates are April 15, June 15, September 15, and January 15. (The dates may move slightly if one of the dates falls on a weekend or holiday.)

To pay your estimated quarterly taxes, you can do one of two things: You can fill out a form 1040-ES and send it to the IRS address nearest you, or you can file electronically using the Electronic Federal Tax Payment System (EFTPS). You have to enroll in the EFTPS before you use it, but after you are all set up, you can use it like an automatic debit for tax payments if you wish, and can even pay taxes over the phone.

Of course, the big question here is, how do you know early in the year what your annual net profit is going to be? First off, that’s why these are called “estimated taxes.” While you can’t quite know your net profit, you also often don’t know which tax deductions you can take, which will lower your tax burden. (Common income tax deductions include mortgage interest paid and child credits.)

Fortunately, since this number is difficult to determine, you will not be penalized by the IRS as long as you pay an amount equal to the amount of taxes you owed last year. (You can find this number by checking last year’s 1040 tax return.)

Looking for more information on Quarterly Estimated Taxes? Read Wrapping Your Head Around Quarterly Estimated Taxes for more detail.

Other Taxes

State Income Taxes — Due Annually and Quarterly

For the most part, state income tax is also due annually, and most states require self-employed people to pay quarterly estimated taxes as well. Each state varies, though, so we recommend looking up your state’s department of revenue or discussing state tax obligations with an accountant.

Sales Tax

While not an income tax, sales taxes are another form of tax that online sellers have to deal with. Essentially, sales taxes are collected by states and localities to pay for things like roads, schools, and other publicly funded endeavors. They do this by adding a percentage to each sale, and it’s up to the seller (you!) to collect this tax from buyers and remit it to the proper place either monthly, quarterly or, in some cases, annually. Generally, you will need to collect sales tax when you make a sale to a customer who resides in a state where you have a physical presence. For example, you live in California, you would need to collect sales tax from your California customers. Find out more about sales taxes here.

We hope this guide has calmed any nerves you have about income taxes. Remember, if you have any questions or qualms at all, consult an accountant or ask the tax and financial professionals over at the Outright Community.

Do you need help filing your taxes? OnePriceTaxes offers Etsy sellers a 20% discount (normally $24.95) and automatically imports your shop’s tax-related data into your return. Visit onepricetaxes.com/etsy for more information.

Team members from Outright and Etsy are visiting 14 cities across the US to share tax wisdom in winter 2013. (Photo by Holly MarshMueller)

Check out this helpful video on tax tips for US based Etsy Sellers

 

What have you learned about taxes? Share your tips in comments.

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3 Featured Comments

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  • CrabbyCats

    CrabbyCats from CrabbyCats says: Featured

    One of the best business lessons I learned was how to keep a simple balance sheet, which is nothing more than a record of profit and loss, or income and expenses. At a glance it reveals the health of my business. It's also invaluable at tax time. It especially helped me become disciplined to record every expense the day it happens. No more lost tax deductions for me!

    2 years ago

  • crochetgal

    crochetgal from crochetgal says: Featured

    I've found that taxes are much simpler to do if some basic record keeping is done throughout the year. That way most of the information needed is already put together and all that's needed are the 'finishing touches'.

    2 years ago

  • Ljmesser

    Laura Messer from Ljmesser says: Featured

    We published an article a few months ago about expenses and deductions for Etsy sellers. That's here: http://www.etsy.com/blog/en/2010/dont-miss-out-often-missed-tax-deductions-for-sellers/. Also, please do attend the online lab where we'll talk about additional deductions.

    2 years ago

  • mazedasastoat

    mazedasastoat from mazedasastoat says:

    I always feel smug reading these annual tax reminders as here in the UK my tax had to be in by the end of January. It would be nice to see a more international bias towards tax advice though...

    2 years ago

  • RigbyandFable

    Megan Moulos from RigbyAndFable says:

    Wow, thanks so much for the tips! Heading to Outright this instant!

    2 years ago

  • thelittlemarket

    Debbie from thelittlemarket says:

    Thank you for keeping us informed when tax time rolls around!! you guys are the best!!

    2 years ago

  • GeorgieGirlLLC

    D George from GeorgieGirlLLC says:

    Thanks for the post, you definitely want to stay on top of your taxes.

    2 years ago

  • CrabbyCats

    CrabbyCats from CrabbyCats says: Featured

    One of the best business lessons I learned was how to keep a simple balance sheet, which is nothing more than a record of profit and loss, or income and expenses. At a glance it reveals the health of my business. It's also invaluable at tax time. It especially helped me become disciplined to record every expense the day it happens. No more lost tax deductions for me!

    2 years ago

  • WellRavelled

    Melissa from WellRavelled says:

    Thanks for the info!

    2 years ago

  • veronicaefimova

    Veronica Efimova from veronicaefimova says:

    should i pay the taxes if i'm not from America? i mean american taxes

    2 years ago

  • RivalryTime

    Phil Jackson from NuptialNotion says:

    Thanks for the advice.

    2 years ago

  • Ljmesser

    Laura Messer from Ljmesser says:

    Veronica - If you aren't based in the US (or an ex-pat), then you are not required to pay US taxes. Thanks!

    2 years ago

  • PennyBirchWilliams

    Penny Birch-Williams from PennyBirchWilliams says:

    I have always done my family's taxes, up to this year. This would be my first year to owe tax on my art sales. I spent a day trying to understand Schedule C and it's instructions... which expenses are and are not deductible, whether I need an inventory or not, etc...until I admitted defeat. We are going to consult a friend who is a CPA and tax preparer. The last thing I want is to mess up on anything to do with the IRS! Maybe after I understand how it works I'll be able to do it on my own again, but having a professional taking care of it this year does give me peace of mind.

    2 years ago

  • ikabags

    IKA PARIS from ikabags says:

    Thanks for the info!

    2 years ago

  • grannancan

    Nancy Stewart from grannancan says:

    I wish there was something like this for Canadians.

    2 years ago

  • SerendipityJams

    LC Designs from TimelessTreasuresLCD says:

    Quick question. Has anyone had experience downloading Paypal transactions in the Quickbooks Online? I have some sales/expenses from earlier in the year that aren't showing up in Paypal. I can manually input them but want to avoid that if I can. Thanks, Kristen

    2 years ago

  • crochetgal

    crochetgal from crochetgal says: Featured

    I've found that taxes are much simpler to do if some basic record keeping is done throughout the year. That way most of the information needed is already put together and all that's needed are the 'finishing touches'.

    2 years ago

  • BOWYERSMYTHDESIGNS

    Elizabeth Bowyer-Smyth from BOWYERSMYTHDESIGNS says:

    Though I'm here in America, it might be helpful to those who aren't if the title read "American Taxes 101". …just a thought.

    2 years ago

  • wa7jos

    Chuck Johnson from Cbar5Creations says:

    This piece was pretty "fluff". How about a discussion of what we can deduct as business expenses. This is likely a place where Etsy sellers are probably selling themselves short. Since we have to pay taxes on our NET income, the name of the game is to find every DIME of expenses to deduct. How about some help identifying them?

    2 years ago

  • bengalspice

    Sharmeen from MinervaKnits says:

    Do you still have to fill out these forms if you are only selling on Etsy as a "hobby" and not as a full business?

    2 years ago

  • ktbrewer1

    Katie Brewer from KTsARTsDESIGNs says:

    How much money do you need to make before you have to file a Sch.C?

    2 years ago

  • mooneycoleman

    T-Byrd and T-Era from EraCaches says:

    I agree with some help identifying expenses to deduct!

    2 years ago

  • elizabethforster

    elle and belle Forster from elleandbellejewelry says:

    I agree with Elizabeth about the title being "American Taxes 101" and with Nancy that Canadian info would also be helpful. But thanks anyway, I imagine some of the same principles apply. Also a good point from Chuck about what expenses can be deducted.

    2 years ago

  • DressyDollsCompany

    Leila from DressyDollsCompany says:

    Outright is great for helping with taxes. I still have tremendous anxiety about ALL the different taxes. I felt like I had to hire a professional to help with this first year of my business. Hopefully next year I will be able to use a simpler service like the one mentioned at the end of the article.

    2 years ago

  • umeone

    Linda Sapp Long from umeone says:

    I just started with Outright and love it! I didn't have the sales last year to make enough money to pay any Taxes. The last year has been a learning experience, the education I recieved from Etsy and Etsy Teams has been invaluable! I'm actually looking forward to paying Taxes this year! Can't wait for the upcoming Tax Lab! Thank you Etsy!

    2 years ago

  • Vintageworks

    Vintageworks from Vintageworks says:

    I have done my taxes for several years with the help of H&R Block online or another well-known company. They do prompt you with questions so you know what business expenses to include. However I have learned a few things on my own - one is: you can take a percentage of what you pay for your internet. For example I pay $48.00 per month. That is a total of $576.00. Now I share that with two other family members plus I do also use it for personal use. So that is 1+ 1+ 1 = 3/4 of the total usage so 1/4 is for business use. So I can claim 25% total paid or $144.00 as a business expense.

    2 years ago

  • Ljmesser

    Laura Messer from Ljmesser says: Featured

    We published an article a few months ago about expenses and deductions for Etsy sellers. That's here: http://www.etsy.com/blog/en/2010/dont-miss-out-often-missed-tax-deductions-for-sellers/. Also, please do attend the online lab where we'll talk about additional deductions.

    2 years ago

  • antotinyhands

    Antuanette from MatchaNest says:

    I am a new seller and I am extremely confused even after reading this...

    2 years ago

  • kgpaintings

    Kirsten Gilmore from PaintingsByKEGilmore says:

    Thank you for the information in this article, such overviews are good. I also think a more detailed Schedule C article would help more, though.

    2 years ago

  • NWKeepsakes

    Mike from NWKeepsakes says:

    I've been looking to transition from hobby seller to a "real business", like I'm sure many before me. Given that, I've got a TON of supplies that I've bought personally. So, when I use those for the business going forward, am I basically allowed to sell all of those materials to the business and deduct all those materials costs? Anybody know or have experience with that? Just wanted to know, as it feels like I'm slipping money under the rug or something, but at the same time it seems totally legit since it is a business expense. Definitely don't want the IRS coming down on me. :)

    2 years ago

  • DeepSilence

    Sonja Bikić from DeepSilence says:

    Interesting.

    2 years ago

  • auniquedesign4u

    pam from stunningstuff4u says:

    hmmmmm...the not-so-fun part of selling..but a duty

    2 years ago

  • WoodlandCottage

    WoodlandCottage from WoodlandCottage says:

    SAVE EVERY RECEIPT!!!

    2 years ago

  • nahir

    Nahil Andujar from nahir says:

    Very helpful, thanks for sharing this...

    2 years ago

  • michelerannells

    Michele Rannells from michelerannells says:

    Do I have to pay taxes quartety if I don't have any Taxes from my state? And if so what form do I use??? Also do I claim(no taxes) if I made under $500.00?

    2 years ago

  • baharaneh

    baharaneh says:

    Do I need to get a tax ID before I start selling on etsy? What happens to the expenses I have made for start up?

    2 years ago

  • mysonflower

    Erica from mysonflower says:

    This article is a great starting point as I approach expanding my shop here on Etsy. Thank you!

    2 years ago

  • LetsAllMakeBelieve

    LetsAllMakeBelieve from LetsAllMakeBelieve says:

    Thanks so much for this! :)

    2 years ago

  • vinylclockwork

    Scott from vinylclockwork says:

    Nice tax post

    2 years ago

  • johanada

    joanna ada from paintingcanvas says:

    yone my shop close in few days take a look and find original and cheap thinks thanks all

    2 years ago

  • CommonCuckoo

    Carrie Mather-Crowner from CommonCuckoo says:

    Thanks for demystifying the tax process a bit. Appreciate it!

    2 years ago

  • SwanStarDesigns

    Kate Swan from SwanStarDesigns says:

    Since Etsy is used all over the world why don't you give information about stuff that isn't just for America?

    2 years ago

  • 3crows

    Sara Pulver from 3crows says:

    You don't need a tax ID, you can use your social security number. You can deduct part of your home if your business uses part of it. Not a bad idea to have a tax man do it for you first time around so it's set up and then you can use that as a template for next years.

    2 years ago

  • Laboiteabijoux

    Sandrine Devost from BijouxSandrineDevost says:

    Interesting! I would really like to see a similar post for Canadian sellers!!!

    2 years ago

  • rym237

    Isabella E says:

    Do I need to pay taxes if I want to sell Digital goods, such as invitations?

    2 years ago

  • PrairiePrimitives

    Tana Taylor from PrairiePrimitives says:

    Testing 123. I posted a lengthy reply but it didn't show up.

    2 years ago

  • PrairiePrimitives

    Tana Taylor from PrairiePrimitives says:

    Ok, guess I got too wordy. I'll break it up into smaller bites. :-) Yes, this article should have been titled "AMERICAN Taxes 101" since that is what it actually discusses. It's likely that Etsy sellers in other countries also need to pay taxes, so let's don't overlook them in future articles! A few tips & suggestions ... for anyone required to pay U.S. income taxes: 1. Keep all your business-related sales receipts during the year. Try to keep them in one place, whether that's a manila envelope, a shoebox, or whatever works for you. 2. If you sell anyplace other than Etsy, be sure to keep track of your sales there too. This includes other online venues as well as craft fairs or sales to your friends and family. 3. Get familiar with Schedule C, especially Part II. Those are many of the items which the IRS allows as deductions. Here's a link to Schedule C: http://www.irs.gov/pub/irs-pdf/f1040sc.pdf 4. A portion of your rent/mortgage, utilities, etc. MAY be deductible as a business expense (the portion that is business-related).

    2 years ago

  • PrairiePrimitives

    Tana Taylor from PrairiePrimitives says:

    And now Etsy isn't letting me post additional comments, which are actually replies to the questions other Etsy users asked above. GRRRR. I'll try again later. Maybe.

    2 years ago

  • PrairiePrimitives

    Tana Taylor from PrairiePrimitives says:

    @Chuck Johnson, T-Byrd & T-Era: This info is in Part II of Schedule C for the most part: http://www.irs.gov/pub/irs-pdf/f1040sc.pdf

    2 years ago

  • PrairiePrimitives

    Tana Taylor from PrairiePrimitives says:

    @Sharmeen: The IRS has some tips on how to differentiate a hobby from a business: http://www.irs.gov/uac/Business-or-Hobby%3F-Answer-Has-Implications-for-Deductions ... although the date at the top of this page is 2007, at the bottom there's an indication that it was reviewed or updated in August of 2012.

    2 years ago

  • PrairiePrimitives

    Tana Taylor from PrairiePrimitives says:

    @Katie Brewer: It's not about a specific amount of money for the IRS. It's about whether you're playing with a hobby or trying to run a business, regardless of how much the business grosses ... OR loses ... in a given year. Read the link in my reply to Sharmeen in the previous paragraph to determine if you have a hobby or business.

    2 years ago

  • PrairiePrimitives

    Tana Taylor from PrairiePrimitives says:

    @Antuanette: First, take a deep breath. :-) Then add up what you sold here on Etsy, as well as at other online venues, craft fairs, consignment, wholesale, etc. Then add up what you spent (and for which you have receipts to back you up). You'll need to file Schedule C with your federal 1040 tax return and I'm pretty sure that to file Schedule C, you'll also need to use the "big" IRS 1040 form, rather than one of the easier forms (1040A or 1040EZ).

    2 years ago

  • PrairiePrimitives

    Tana Taylor from PrairiePrimitives says:

    @Mike: I don't think the IRS will let you "sell" your previously purchased supplies to your business; in fact I'm pretty sure they won't allow this. Yeah, it stinks for those of us who have a LOT of money invested in supplies or equipment. But that's the way it goes sometimes. Sigh. You can always call the IRS toll-free number and ask questions of those who *should* know these things (I'm trying not to laugh here). The IRS has a bunch of different phone numbers depending on your filing status and/or questions. Here's a link to that info: http://www.irs.gov/uac/IRS-Offers-New-Toll-Free-Numbers-to-Assist-Taxpayers

    2 years ago

  • PrairiePrimitives

    Tana Taylor from PrairiePrimitives says:

    @Michelle Rannells: Looks like you live in Ohio. Don't they have both a state income tax and sales tax? (Some states don't have one or the other, lucky folks there!). For income taxes, start with the IRS 1040 and Schedule C. You should be able to get your state's income tax forms at your local post office or library, or online here: http://www.tax.ohio.gov/Forms.aspx (NOTE: I just Googled for Ohio income tax forms ... so for anyone living in a different state, just replace Ohio with the name of your state!) I think the IRS rule is that you need to pay quarterly taxes if you expect to owe more than $1,000 in taxes at the end of the year. With $500 in sales, there's no way you would owe $1,000 in taxes. I don't know whether Ohio wants you to file quarterly state income taxes, but I'm sure the info is on the web site I linked to above! Whether or not you "claim no taxes" depends on whether you're playing with a hobby or trying to run a business. See the link I posted above to the IRS page about hobby vs. business.

    2 years ago

  • PrairiePrimitives

    Tana Taylor from PrairiePrimitives says:

    @Isabella: If you're asking about INCOME taxes, read the info at the link I posted above for the IRS' determination of hobby vs. business. Digital goods *sometimes* fall outside the rules of SALES taxes, but if you have a business, then you need to be filing Schedule C, that is if you're required to file U.S. income taxes. * * * * Whew. There. Sorry for all the separate posts. Some of them reference stuff from a reply I made to someone else.

    2 years ago

  • lesleysymmonds

    Lesley Symmonds from ABrikABrak says:

    Is there a minimum dollar amount you have to sell before needing to file income or sales tax? I have sold a few items on Amazon.com and have never had to worry about paying tax. They say you have to pay taxes only if you have more than 200 transactions AND more than $20,000 unadjusted gross sales. Most of us probably don't fall into that category. Can someone please confirm if this is correct?

    2 years ago

  • eelizabeth

    Elizabeth Novak from withcaregoods says:

    Hello- Is it possible to view the online lab after it has been completed?

    2 years ago

  • luxurychest

    Creative Force from LUXURYCHEST says:

    @Lesley Symmonds CONFIRMED! You took the words right out of my mouth. If you have 200 transactions and over $20,000 gross then you will be reported to the IRS. I've sold on ebay and used paypal for over a year and I researched further in to this and by law set in place by congress you have to pass two of those thresholds at the same time 200+ transactions and $20,000+ in one year all money merchants are required by law to report sellers meeting those thresholds. BUT hold on to your receipts people because that tricky US congress could lower that threshold at anytime they want. All of this internet tax filing crap started in 2011.Before that you could make 1 million or 1k in a year on the net and not pay a DIME in tax. I hope they don't impose the new state tax for each buyer state.I hope my post helped.

    2 years ago

  • nicoleponton

    Nicole Pontón from nanazola says:

    this might be a ridiculous question, but i am relatively new to etsy and am curious: since i opened my store at the end of last year, i didn't make much money for 2012. is there a minimum one needs to make, or some kind of threshold for this? I have a 1099 for a totally unrelated business from earlier in the year, but don't know how to/whether i need to include the little i made from my etsy store last year.

    2 years ago

  • sundriedstars19

    Kiana from sundriedstars19 says:

    ok so i have a question. This is my first year doing taxes since I'm now 18, but i've had my etsy shop since before i was 18. Do i only need to file for the time I was 18?

    2 years ago

  • jeri3

    jeri3 from jeri3 says:

    In the US, if you made over $400 you need to report it to the IRS as income, pay taxes on it, or take the chance of a audit. THEN, open yourself up to investigation for previous years, PLUS fees and penalties and charge for negligence for not reporting. Schedule C is for "Profit and Loss". Please go to IRS website or get CORRECT information regarding Schedule C. There are many deductions you can take to offset the money you made. I just fininshed my "correspondence audit", first audit in my life !...and it is not fun ! Just when you think you are done they will send you and request another form to be filled out. AND ! They will find "something" that is wrong and you will have a balance due. Keep all of your receipts, SO important, you will need them all and get the """correct""" information. AND, the 200 transaction, $20,000 threshold...find out what it REALLY means ! My audit was on approx $7000 The "self" employed are targeted more than someone who has a regular employer so BE Careful !

    2 years ago

  • geowrian

    Ryan Balara says:

    Disclaimer - I'm not a professional tax agent. The following information is from experience and a personal understanding of the tax code. *Always* do your own research and/or seek a CPA or tax professional if you are unsure. All taxable net income is required to be reported annually to the Federal government. As the article states, quarterly filings and state and local items may (and usually) apply as well. There is no "minimum" number of transactions or sales required. There are certain thresholds before the marketplace or an employer are required to provide you with statements and report it to the IRS as a check. If they do this and you don't claim it or file at all, it acts as a mechanism to identify who isn't paying. However, a lack of statements does not exempt you from the requirement of claiming the income. Realistically, the IRS isn't going to go after you for selling a few relatively small items on eBay or similar. It's not worth the effort to track and pursue it. However, if you are making several hundred or thousand from a single source, it's easier to identify and makes an audit more likely.

    1 year ago

  • geowrian

    Ryan Balara says:

    As a followup to my previous comment... Although you are required to report income at a federal level, it is not taxable until $400. So many people in this category probably don't report it at all since it is another case of not being worth the effort to be pursued for a $0 change.

    1 year ago

  • erikwoodsdotcom

    Erik and Christina from ErikAndChristina says:

    This article really should lead in with the video. I found it much easier to follow the video than to try and read through the article, for some reason. Very useful information overall, though. I like that Etsy recognizes that it is in their best interest to educate their users about paying taxes. It only makes me feel better about the shop I am about to set up for my wife and I. Thanks Etsy - and thanks to Laura Messerschmitt and Outright.

    1 year ago

  • GAsPeach

    Sarah A from GrandmaPamsGarage says:

    Umm, I have a question. What if this isn't your main job, like you only sell a few items (i.e. 30 items for under $500), do you still have to pay taxes on it? What of you are a minor (under 18)?

    1 year ago

  • bankernews

    John Robinson says:

    So 16.5% is the total Tax for FICA and FUTA? for self employed person?

    1 year ago

  • Batluv1

    Patricia from FashionsWithStyle says:

    Does Etsy have an automatic button to add sale tax without looking up all of the states individually? Can i program it into my shopping cart?

    1 year ago

  • Calla49

    Beverly Stepp from CassNBellCreations says:

    Good Question, Patricia~

    1 year ago

  • msoley

    Jessica from TshirtsUniversity says:

    One question, Can I deduct personal or dependence exemptions and standard or itemized deduction in my 1099 K?

    1 year ago

  • LuxyAllure

    Abigail from Contortum says:

    actually I am more nervous after reading this. good information but totally over my head :(

    1 year ago

  • backcreekclay

    Pat Siler from backcreekclay says:

    My most profitable Etsy shop is SmokyMountainVintage. Many of the items are family heirlooms that came from both sides of our family. Do I have to report the full amount of the sale? I didn't buy the items, but have had some of them for many years.

    1 year ago

  • nlbgrammy

    nlbgrammy from Qt2t says:

    Thank you, thank you, thank you for this post!!!

    1 year ago

  • karenwehr

    Karen Wehr from IODIEBAG says:

    Lots of great information!! Thank you for posing for us!

    1 year ago

  • BonnetsBagsTreasures

    Lisa Marie - Kimberly J - Renee Jane from BonnetsBagsTreasures says:

    Great question "backcrekclay". Thanks Etsy for the great information. Now the question is to "use or not use" an accountant. Sincerely Lisa Marie

    1 year ago

  • ArtisanSoapInVegas

    Artisan Bath and Body from ArtisanBathandBody says:

    Amazing post! Thank you very much for the info. It is really appreciated, specially when it's your first year on Etsy!

    1 year ago

  • gallerySATI

    Shelley Irish from gallerySATI says:

    When you are doing your Schedule C it is very important to be clear on your expenses. Anything you have bought that is not 100% for business should not be included on your Schedule C. Just like the home office deduction requirements, if it is not 100% for business, it does not belong on your Schedule C! Say you bought a package of beads. There were 10 beads in the package and you used 6 of them to create beautiful products you sold on Etsy during the tax year you are reporting. The other 4 you used to create holiday gifts for your loved ones. You would include just the cost of the 6 beads in your Cost of Goods Sold section on your Sched C rather than the entire package of 10 beads being listed in your Expenses / Supplies section of your Sched C. These little things (and the bigger things, of course, like computers etc) make a BIG difference in the profit or loss you report to the IRS and can have larger implications down the road, like when you are applying for a business loan or a mortgage.

    1 year ago

  • cr8tive1971

    Tiffany Turner from Hype365Brand says:

    Sounds like outright is definitely something I need. Thanks for the tax information.

    1 year ago

  • animalcharm

    Tina Lynn from AnimalCharm says:

    Great information. Thanks for the extra support! Much appreciated.

    1 year ago

  • bsimplebows

    bsimplebows from bsimplebows says:

    is there another site besides onepricetaxes.com. ive have had sooo much trouble trying to get my etsy info on this site.

    1 year ago

  • karenroos

    Karen from HerminasCottage says:

    Don't forget if you use your home as your store there is a percentage of taxes, mortgage, electric etc that I believe you can write off also.

    1 year ago

  • DomusModern

    DomusModern from DomusModern says:

    I tried to use this service, but for some reason it won't link to my Etsy account.

    1 year ago

  • PeppermyntPatti

    Peppermynt Patti says:

    I am not seeing a video at the end...perhaps it's been removed.

    361 days ago

  • mikinmiki

    Miki Powell from BreathebyMiki says:

    hi, Peppermynt Patti i'm going to watch the video now it's closer to the top before all of the comments, some really informative comments i might add!!!

    320 days ago

  • paperwingpress

    paperwingpress from PaperWingPress says:

    They really shouldn't advertise this as a free service. It costs $10/month. This post is outdated and Outright is now owned by GoDaddy. Anyone know of any similar free tools?

    294 days ago

  • maddieloos

    Marsallai Quick from Maddieloos says:

    THANK YOU! I had my questions answered.

    246 days ago

  • sharondevoll

    Sharon Vail from SharonVail says:

    I am still not sure how to handle income taxes. All the items I want to sell have been hand made from product that I purchase or raised or acquired from a previous business. Meaning the raw product or expense has already been accounted for in previous years. I want to reduce my inventory of yarn and fiber by selling hats, scarves, yarn, etc. Do I just report the net income? My expense is my time to make the items. I don't usually make more than $1000 from the sale of my products.

    114 days ago

  • PerfectPixel

    Lynsey Betz from ShinyMagic says:

    This really doesn't help, I know you want referrals to Outright and I know it helps organize things better but you still manually have to organize them in the outright section. This only mentions schedule C taxes, what if you pay them at the end of the year in one lump sum? What forms do you fill out etc? Not very helpful.

    112 days ago

  • gogogone

    KODACHROME VINTAGE from KodachromeVintage says:

    Outright doesn't exist anymore, it's now owned by GoDaddy, and there isn't a free version. Any updated resources? And what forms do you fill out if you don't meet the 1099 K requirements with Etsy or PayPal? Help, please! I also think Etsy should send out more info on taxes throughout the year. I was unaware of the quarterly payments, and I assume a lot of other first time sellers are as well. Obviously, it's our job to do research, I just feel the topic of taxes should be mentioned in some of the newsletters Etsy sellers get. I'd love some updated information and resources! Thanks again!

    103 days ago

  • sunainaseverinsson

    Sunaina from NaynaJewelry says:

    Thank you for all this info Laura. I was working on my Schedule C this past weekend. I feel pretty confident doing my own taxes right now. However, I think I need to totally separate my banking info from my personal. I have everything all mixed up - and while I know what costs are business versus personal, GoDaddy's Outright doesn't know that. And Paypal doesn't know that. So I have to clean those up at the end of the year which is a royal pain! I've started blogging about running an Etsy shop personally - there is a lot to know about being a businesswoman!

    50 days ago