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Wrapping Your Head Around Quarterly Estimated Taxes

Sep 12, 2012

by outright

Etsy.com handmade and vintage goods

Outright.com brings you straightforward tips on simplifying your accounting and putting the focus back on the creative. (Note: This info may only apply to US sellers.)

Sole-proprietors in the U.S. — the vast majority of U.S. Etsy sellers included — get the pleasure of paying taxes not once, but four times per year. And one of those deadlines is coming up in just a few short days.

Why Quarterly Estimated Taxes?

When you work for a company as an employee and receive a regular paycheck, income taxes are fairly simple. They come out of your paycheck before you can even grasp it in your hot little hands, and only around April 15 do you have to worry about filling out some forms and, hopefully, getting a hefty refund electronically deposited later.

But for those of you who are sole-proprietors, you don’t have the luxury of an employer conveniently deducting taxes from your paycheck. You are tasked with sending these taxes straight to the IRS yourself.  The IRS requests that this be done four times a year; thus, quarterly estimated taxes.

How Much Do I Pay?

All income taxes sent to the IRS are “pay as you go.” But since most people pay throughout the year by tax withholding in their paychecks, they don’t have to worry about calculating estimated taxes like many Etsy sellers and other sole-proprietors do.

The IRS does offer us a little guidance when it comes to figuring out how much to pay. For example, even if your business has grown by leaps and bounds this year, as long as you pay the same amount of tax you owed last year, you are safe from IRS penalties and fees (this is known as the safe harbor rule). Also, you only need to pay quarterly estimated taxes if you will owe more than $1,000 in taxes at the end of the year.

The easiest way to pay your quarterly estimated taxes is to simply look at how much you owed last year and pay the same amount. But you may not want to do that for any number of reasons, most notably underpayment and overpayment. If you know you will owe a lot more this year than last year, you may want to make higher quarterly estimated taxes and just get it over and done with to avoid a huge tax bill in April. On the other hand, if you are making less this year than you did last year, you may not want to match last year’s tax liability. Sure, you get a refund at the end of the year, but would you rather the IRS hold on to your money or let you keep it?

If you want to calculate how much you will owe for the year, check out Outright.com’s Tax Tab. A favorite Outright.com feature is the estimated tax calculation, where you can get a rough estimate on how much you might want to pay per quarter.

How Do I Pay?

While figuring out all the rules and regulations regarding your quarterly estimated taxes is pretty difficult, naturally the IRS makes it fairly easy to pay. All you need to do is download form 1040-ES, fill out the voucher, and send it, along with a check, to your nearest IRS office. The Form 1040-ES even provides the addresses based on your location.

What If I Don’t Pay My Quarterly Estimated Taxes?

You rebel, you! As distasteful as the thought of shelling out your hard earned money is, there are financial penalties involved if you don’t pay four times per year. The simple calculation is that you’ll pay 3% annual interest of what you’ve underpaid (based on 2010 published IRS interest rates). If you haven’t paid up by the end of the year, the IRS will calculate how much you owe in penalties and fees based on your tax return. “Three percent” is not a consistent or exact number, so if you are considering underpaying, this is one area where it’s often beneficial to ask for an accountant’s advice. Or better yet, just take your medicine and make your quarterly estimated tax payments so you don’t have to deal with complicated forms and formulas at the end of the year.

Quarterly estimated taxes are how the government takes its piece of your business pie. For better or worse, taxes are due.

Seller Handbook | More Articles on Taxes

131 comments

  • AdornmentsNYC

    AdornmentsNYC said 6 years ago

    Thank you for sharing this info - very helpful! Martin - Adornments NYC http://www.AdornmentsNYC.etsy.com

  • Evajune

    Evajune said 6 years ago

    Thank you for the tax tips. I found this article very useful.

  • TwinkleStarCrafts

    TwinkleStarCrafts said 6 years ago

    Thank you so much for the tax help and the support.

  • bylynnkrestel

    bylynnkrestel said 6 years ago

    ouch...our least favorite subject!!

  • SimpleJoysPaperie

    SimpleJoysPaperie said 6 years ago

    Thanks for the reminder! :)

  • tftvintagehome

    tftvintagehome said 6 years ago

    Thank you for the tips!!

  • VivaGailBeads

    VivaGailBeads said 6 years ago

    this is very useful information!

  • LeafandInk

    LeafandInk said 6 years ago

    It's so important to be on top of this before it bites you in the behind! This is valuable information to all Etsy shop owners & I encourage everyone of you to be on top of the administrative side of your creative business and create a solid foundation so it never gets out of hand. Lisa LeafandInk.com

  • ScrapHappyLyrebird

    ScrapHappyLyrebird said 6 years ago

    Thanks for this! I love outright!

  • HarrietsHaven

    HarrietsHaven said 6 years ago

    Thank you so much for this info. Very useful.

  • ElizabethOHara

    ElizabethOHara said 6 years ago

    I have a great accountant who keeps me on the straight and narrow and doesn't let me forget to make a payment when I need to or to file when I have to! Taxes, inevitable.

  • thecraftpantry

    thecraftpantry said 6 years ago

    Great info, thank you!

  • Cranmommissy

    Cranmommissy said 6 years ago

    Very helpful. Thank you, Etsy!

  • JoannasPhotography

    JoannasPhotography said 6 years ago

    Very helpful! I had found Outright via Etsy and have been using it for over year now and now taxes are just one more easy thing to take care of- no more tax-stress!

  • Mclovebuddy

    Mclovebuddy said 6 years ago

    thanks! this definitely helps. :)

  • ZenAndCoffee

    ZenAndCoffee said 6 years ago

    Oh wow! I wish I had known this sooner! Despite being a registered business, and keeping track of all my records for tax time, I was not aware of having to pay 4 times a year! Looks like I had better get on the ball and call my accountant! I'm semi curious why they never mentioned this- mind you I've only been open since February, but still! Thank you for this article!!! Its a life saver! I signed up for Outright during the last article about them, and this feature is great! ~Wren ZenAndCoffee.etsy.com Arm Warmers & Fingerless Gloves for all seasons & styles! ~~~ Custom Orders Welcome! ~~~

  • ekra

    ekra said 6 years ago

    Thanks for the reminder!

  • Parachute425

    Parachute425 said 6 years ago

    taxes? What are these taxes that you speak of?

  • GoblinSupermarket

    GoblinSupermarket said 6 years ago

    Oh no! I have tax trepidation. Thanks for the link, a lot to learn. Does anyone know if theres a minimum that you dont have to pay taxes on? Such as if I only earn under $500 per quarter or year. courtney http://www.goblinsupermarket.etsy.com tempting adornment

  • Hammermann

    Hammermann said 6 years ago

    Perfect! One of the things on my today's to-do list is to calculate the quarterly taxes to mail them next week.

  • sarahkincheloe

    sarahkincheloe said 6 years ago

    I've been thinking a lot about this... I increased my hub's and my withholding from our day jobs this year and I'm not quite sure how much I should be sending in. It's also extra complicated when you make most of your income in the winter months but they expect you to send it payments in March and June when you made next to nothing!

  • shinegirlzjewelry

    shinegirlzjewelry said 6 years ago

    OMG! Taxes Yikes! Thanks etsy for the reminder and all the help! Beth

  • lilliannelee

    lilliannelee said 6 years ago

    Great info!

  • happygolicky

    happygolicky said 6 years ago

    Below are some great tips for tax deductions that might be overlooked by newbies if you are going at it yourself. So many things you do are deductible- part of your mortgage for studio space, mileage to the post office & supply store EVEN if you DON'T find the supplies you need. Read more: http://www.allbusiness.com/personal-finance/individual-taxes/2481-1.html http://www.bankrate.com/finance/money-guides/a-dozen-deductions-for-your-small-business-1.aspx Thanks for the informative article!

  • mymothershouse

    mymothershouse said 6 years ago

    Thanks for this helpful article. I'm still doing my homework ( and enjoying learning all the Etsy) before opening my shop. I'll add it to my list. Hard to know how to estimate your first year. Any advice? - Newbie

  • ArtisticIntentions

    ArtisticIntentions said 6 years ago

    Great information - thanks!

  • mymothershouse

    mymothershouse said 6 years ago

    Thanks for the helpful article. I am still doing my homework and learning all "the Etsy" before opening my shop. Thanks too happygolicky for the links above. My question is how do you know how much to estimate your first year? Anyone have advice, ideas suggestions? Newbie

  • Jusadreamin

    Jusadreamin said 6 years ago

    Thanks for the information

  • thecottagemarket

    thecottagemarket said 6 years ago

    thanks for the reminder! appreciate it!

  • cuddlehugs

    cuddlehugs said 6 years ago

    Excellent advice & thank you happygolicky for the additional websites/info :)

  • debdeanart

    debdeanart said 6 years ago

    Important info..thank you!

  • DevilMakesWork

    DevilMakesWork said 6 years ago

    Hey here's a tip! Don't calculate your own estimated tax penalty on the return. If you get it wrong and overpay the IRS won't refund it to you! Let the IRS calculate the penalty for you.

  • DevilMakesWork

    DevilMakesWork said 6 years ago

    not only am i crafty but i'm also a tax professional. heheh.

  • sweetpeaNmeDesigns

    sweetpeaNmeDesigns said 6 years ago

    I'm not a registered business (and sadly, no sales yet anywasy) - do I need to register? If not, do I simply state my earnings annually on the federal tax form????

  • HoneysuckleLane

    HoneysuckleLane said 6 years ago

    Taxes... one of the certainties...

  • julessabjewelry

    julessabjewelry said 6 years ago

    Taxes... ugh... I just finished my corporate taxes and it was not fun! But, luckily I have a great support system with my accountant. These are fantastic tips and great work for sharing the tips. Oh yeah, take heed to DevilMakesWork's comments on calculating your penalties - don't do it.

  • julsofparadise

    julsofparadise said 6 years ago

    Pay taxes? I need to find out the minimum earned to begin paying taxes. I've spent way more on glue alone than I've ever made! But thanks for the heads up!

  • earlybirdgraphics

    earlybirdgraphics said 6 years ago

    I'm not making enough yet to pay quarterly taxes… maybe next year!

  • autumnraincreations

    autumnraincreations said 6 years ago

    Thank you for sharing. Marking for when I need this info.

  • TheCove

    TheCove said 6 years ago

    WOW!!! This is huge. As I am just starting out, this info will help me tremendously. Thank you!

  • RomanceCatsAndWhimsy

    RomanceCatsAndWhimsy said 6 years ago

    Great article - thank you so much!

  • designlab443

    designlab443 said 6 years ago

    nice info that is easy to understand, thanks for sharing!

  • JJMFinance

    JJMFinance said 6 years ago

    If anyone has any specific tax related questions for their Etsy business, feel free to send me a convo and I will help you the best I can. I am a CPA.

  • Katexpressions

    Katexpressions said 6 years ago

    Here in NY we can either pay by snail mail or on-line. I just received a postcard in the mail reminding me that my taxes would be due soon so I'm all set. Thank you for helping us keep on top of the things we don't like as much! :) I appreciate it!

  • HsuLeeDesigns

    HsuLeeDesigns said 6 years ago

    if you are planning to file taxes with your spouse, do you have to pay the quarterly estimated taxes on the business?

  • DetroitKnitter

    DetroitKnitter said 6 years ago

    Thanks guys for posting all the other little links too. I'm just getting started and this is helpful!

  • MoonriseStudio

    MoonriseStudio said 6 years ago

    Thanks a million! I've been looking for info on this for awhile, nice to finally have it handy. :)

  • kreationsbykareng

    kreationsbykareng said 6 years ago

    marking so I can find all the links again!

  • owlsay

    owlsay said 6 years ago

    Now I'm confused! I thought with a sole-proprietorship there were no specific business taxes. I thought the owner paid taxes on income from the business as part of his or her personal income tax payments - yearly, not quarterly. Guess I better do some more research!

  • BGBJewelry

    BGBJewelry said 6 years ago

    Great info here! Thanks so much for the reminder.

  • GreenBeautyCosmetics

    GreenBeautyCosmetics said 6 years ago

    Very good points! Many small business owners get in trouble if they postpone the inevitable (such as paying taxes). I also want to make you aware that if you are selling hand made items, there are fairly complicated rules for what you can and can't take off as a business expense. You can take off shipping, fees, advertising and office expenses, but when it comes to supplies, such as packaging and materials, you can only take off the cost of goods sold. So, if you have spent $1,000.00 in supplies, and the cost of the goods that you sold was only $400.00, then you can only take off $400.00 as a business expense in the year it was sold, and not the full $1,000.00. The problem with this is that even though it looks, on paper, as if you didn't have much of a profit, you may have more profit than you thought after you fill out the IRS form for calculating the actual cost of goods sold. To calculate your profit before you send them your estimated tax payments, the easiest way to deal with this brain frying issue is to just take off a fixed percentage of every item that you sold, that way you don't have to figure out what the cost of every single item was when calculating your estimated tax. For example, if you just sold 10 items, you can add up the cost of creating each item, divide the number by 10, and then figure out an average percentage for the cost of goods sold. So, if you get that the average cost of an item is 30%, you subtract 30% from your gross income. Then subtract the shipping fees, advertisements, other fees and office expenses etc, and what you are left with is your taxable profit. Multiply that with your tax percentage, and your estimated tax payment will be pretty accurate.

  • GreenBeautyCosmetics

    GreenBeautyCosmetics said 6 years ago

    Minimum earnings before you have to pay taxes when you are self employed is only $400.00 for the year. If you are employed by others, you can make way more before you have to file. So, there isn't really a way around it.

  • GreenBeautyCosmetics

    GreenBeautyCosmetics said 6 years ago

    When it comes to taking off the interest from mortgage payments, and depreciation for use of office space or business car, be careful! If you are planning to sell your house or car in the near future, the profit that you make on anything you have taken off your taxes for business use, is considered taxable income. So, don't take off a percentage for your studio space unless you are planning to keep your house.

  • GreenBeautyCosmetics

    GreenBeautyCosmetics said 6 years ago

    Someone mentioned that they didn't think sole proprietors have to pay estimated taxes. For your information, they actually have to pay more taxes than people who are employed by others. If you are employed, your employer has to pay half of your social security tax. If you are self employed, you have to pay 15.3% to social security. The good thing is that, as a self employed person, you are allowed to take off more expenses from your gross income. So, that evens it out a bit.

  • CHADz

    CHADz said 6 years ago

    I'm new to selling handmade items and this has really clarified some questions I had. Thanks for the info.

  • boemlerrosedesigns

    boemlerrosedesigns said 6 years ago

    I'm just starting out. Do any of you more experienced ETSY'ers have a favorite method or software for tracking expenses and sales so tax time is a cinch?

  • bellabiscotti

    bellabiscotti said 6 years ago

    I needed this advice! Going to check into Outright.com

  • AprilCreates

    AprilCreates said 6 years ago

    Thank you! I signed up and now have my accounting under control. I can't tell you how thrilled I am!!!

  • pamelaspatterns

    pamelaspatterns said 6 years ago

    GREAT TOPIC thanks everyone for sharing your knowledge! Hate to say this but right now I'm thankful I don't yet have to worry about this little item BUT on the flip side let the SALES begin, I can't wait to jump into the tax frying pan!!!!! :)

  • MischievousKitty

    MischievousKitty said 6 years ago

    Guess this is the advantage of having a day job! Since my jewelry business is just a fun little side gig to make a little extra money (for now at least!), my withholding from my day job covers all the taxes I owe for the year and then some, since I don't claim any exemptions on my W-4. I may eventually be stuck paying quarterly taxes, but for the time being I don't have to worry about it. ;-) (And I know, it's silly to let the government basically get an interest-free loan from me, but I'm more likely to put the extra money into savings if I get a big refund check each spring than if I get it as a slight increase in each paycheck!)

  • Jusadreamin

    Jusadreamin said 6 years ago

    THANKS for information www.jusadreamin.etsy.com

  • JeweledAmbrosia

    JeweledAmbrosia said 6 years ago

    these are great tips! but in some states, if you contact your tax office you can have it arranged for you to pay only once a year.

  • LoLosDesigns

    LoLosDesigns said 6 years ago

    Thanks for keeping us on track! Very useful information.

  • SteelPetalPress

    SteelPetalPress said 6 years ago

    Thanks for this! I'm working on my taxes now... so what happens if I pay all three payments in one lump sum this September --- which is what i'm doing? I will have paid the total due, but not in 4 payments? Will I get penalized? Thanks!

  • sevgi

    sevgi said 6 years ago

    I'm going to be two days late--anyone know if there's a penalty for that? It's my first time sending in these forms.

  • BricABracVintage

    BricABracVintage said 6 years ago

    very helpful,thank you!

  • ShadowCutter

    ShadowCutter said 6 years ago

    I get confused every time I see something about these taxes. in the description on the IRS website it says that you pay this tax IF you expect to owe at least $1000 in taxes at the end of the year. these articles never say that. if you're not actually making any money (filing a loss or just making hobby income), do you pay this or not? for self-employment tax it says you have to make at least $400 in the year before you owe anything.

  • whichgoose

    Emily Suidikas from whichgoose said 4 years ago

    I'm having a 15% off sale in honor of the HUGE tax amount I have to pay this month!!!

  • ChaosSupplies

    Jessie from ChaosSupplies said 4 years ago

    Shadow Cutter says: "in the description on the IRS website it says that you pay this tax IF you expect to owe at least $1000 in taxes at the end of the year." Yes, that's right. This article should really address that.

  • StringBeardCraftery

    Stephanie from StringBeardCraftery said 4 years ago

    I'm not not at the point to need to worry about taxes yet, but I can't wait to be!!!

  • LivingVintage

    LivingVintage from LivingVintage said 4 years ago

    Always a fun time!

  • Pantora

    Andrea from Pantora said 4 years ago

    Vote for me http://blackcelebrationawards.com/fashion-nominees/

  • Iammie

    iammie from iammie said 4 years ago

    I'm not a US seller, but it's good to know anyway. :)

  • eganaise

    Paula Egan from eganaise said 4 years ago

    I'm at that point of having the honor of paying quarterly. Thank you for this article, very helpful. Helpful comments as well.

  • froufroubijou

    Sarah Feldman from StockFrock said 4 years ago

    I pay annually. I don't know why they decided to do that, but that is how I pay. Also, if you have any issues with the IRS...PLEASE call them on the phone! They are extremely nice and helped me out so much when I first started paying for sales tax!!

  • froufroubijou

    Sarah Feldman from StockFrock said 4 years ago

    Andrea...stop spamming.

  • Ljmesser

    Laura Messer from Ljmesser said 4 years ago

    This is Laura from Outright. Yes, it is correct that you don't need to be Quarterly Estimated Taxes if you owe less than $1000 at the end of the year. Unfortunately, though, it can be hard to know if this applies to you or not. We'll talk more about this on Wednesday's online lab.

  • froufroubijou

    Sarah Feldman from StockFrock said 4 years ago

    Oh that would be cool. It would nice to be quarterly....because then I'd be making more money.....le sigh.

  • AJHetz

    AprilJoy from TheMintGreenTagSale said 4 years ago

    This is what I am taking away from this article... Limit sales to $399/ yearly to stay under the radar...

  • froufroubijou

    Sarah Feldman from StockFrock said 4 years ago

    lol April

  • LadyDanio

    Sarah from LadyDanio said 4 years ago

    This still doesn't make sense. How do I know if I have to pay quarterly taxes? This article did nothing for me but create unnecessary fear (and loathing, ha.).

  • Ljmesser

    Laura Messer from Ljmesser said 4 years ago

    Sarah - Send me a private message if you want to discuss... Sorry to hear that you are confused, but happy to help. Thanks!

  • Chrissstuff

    Chris Martineau from OfUsualtees said 4 years ago

    Very excited about this Wednesday's lab mentioned by Laura Messer. But for now I think I am just day dreaming about needing to worry about this stuff. :D Step 1, hurry up and get busy so I can sell more... Step 2 make at least $1000. Maybe, oh well just wait until Wed. then make a game plan!

  • studiorandom

    Dana Seilhan from studiorandom said 4 years ago

    I'm looking at the IRS website right now in another tab and there's some good news for those of you who have a brand-new business this year and have not made your quarterly payments. If you meet ALL THREE of these requirements you do not have to pay quarterly tax *this year*: (1) You had no tax liability for the prior year; (2) You were a U.S. citizen or legal resident for the entire prior year; and (3) Your prior tax year covered a 12-month period. If you meet ALL THREE of those requirements and you're just starting out, it is a sort of a grace period for you. Obviously, double-check with your friendly neighborhood tax professional to ensure that ALL THREE conditions applied to you. I'm particularly interested in the definition of "tax year"--do they mean your accounting year or *their* tax year? Worth following up.

  • mazedasastoat

    mazedasastoat from mazedasastoat said 4 years ago

    Surely doing it quarterly makes it very much easier? Here in the UK, if you're self-employed all the accounts & taxes just have to be done once a year... a truly mammoth task even if you're fairly well organised! Good luck to all you US folks, keep reminding yourselves how much you get for your tax dollar! ;-)

  • TreasuresandBeyond

    TreasuresandBeyond from TreasuresandBeyond said 4 years ago

    Thanks for keeping us informed.

  • vinylclockwork

    Scott from vinylclockwork said 4 years ago

    Great info about the dreaded T word

  • mikinmiki

    Miki Powell from BreathebyMiki said 4 years ago

    Thanks for all your info guys! Lets make sure we cover our buttocks.

  • megandempsey

    Megan Dempsey from JBCountryCouture said 4 years ago

    Question? What if right now I have been just doing my etsy shop as a hobby and haven't gotten a tax id number yet for a business, when i do become an actual business....how will i know how much to pay at each quarter since I do not have a last year to look at? (hope this question makes sense)

  • Ljmesser

    Laura Messer from Ljmesser said 4 years ago

    Megan - Good question. The IRS defines a hobby as "an activity not engaged in for profit." So, if you are making a profit, you are likely considered a business, for tax purposes. That doesn't mean that you need a tax ID or anything... just that you are supposed to report your profits on your tax return. And, you are supposed to pay estimated taxes if you are expected to owe over $1,000 for taxes for the year. Hope that helps! Thanks, Laura from Outright

  • SimpleJoysDecor

    Ruth from SimpleJoysDecor said 4 years ago

    How much would one have to make from sales before falling into the class of owing $1000 in taxes?

  • Webbscreation

    Billy Webb from Webbscreation said 4 years ago

    What if your business doesn't make any money? Where is the best place to find help with the taxes?

  • mzkitty

    mzkitty from mzkitty said 4 years ago

    How much money does your business have to make to be required to do these taxes?

  • customaccentpillows

    Lori from LePillowBoutique said 4 years ago

    How does this affect me if I do not have a business license and do not sell much?

  • artisanwoodcrafting

    artisanwoodcrafting from artisanwoodcrafting said 4 years ago

    why do these articles always make it sound like something is NECESSARY? you are only required to pay quarterly, if you expect to 0we $1000 or more at the end of the year. which roughly equates $4000 in profit. and there are many other factors, such as if you already normally get a $2000 refund each year, then that means you could probably have $8000 in profit before you even start owing the IRS anything. there are several different factors that determine if you need to file quarterly, and there are ways to even avoid it. you can avoid it by having them withhold more from you or your spouses regular paycheck to cover those taxes.

  • DaisyPoncho

    Carrie Jordan from SoulSingBoutique said 4 years ago

    You should all head to outright.com. My biz doesn't make any money right now either because I just started 2 months ago. I made an account and filled out the info in outright and it says I do not owe any money. Etsy people- thanks, this post is very helpful!

  • McKenzieCreekJewelry

    Susan Gammons from McKenzieCreekJewelry said 4 years ago

    It's my understanding that there are three types of taxes to file and pay: Personal Income tax on your profit (file yearly) State and local income taxes on your in-state sales (this can be monthly, quarterly, or annually, depending on how much your revenue is...mine is annual). Self-Employment (social security) tax payments if you have over $400 net profit in a year. These are to be filed quarterly and seem to be the topic of this article.

  • BereniceDesigns

    BereniceDesigns from BereniceDesigns said 4 years ago

    Thank you so much, very useful information and sites that I did not know existed like the Outright website, as soon as I found out and signed up. I have basic math skills and with this tool I think it will be a lot easier for me to keep track of what I am doing. Big thanks!

  • crystalkelliher

    Crystal Kelliher from ButtonfootHandmade said 4 years ago

    As many have commented this article scared me and had me calling my accountant, but it's once a year for me as well in Massachusetts. Many of us newbies will barely break even so we really need to look at all our deductions at the end of the year;) thanks for the reminder though.

  • ConfettiWestern

    Liz Layton from ConfettiWestern said 4 years ago

    I have no idea what to do!! Eeeek!

  • KLDesignsLLC

    Kristal DeBold from KLDesignsBoutique said 4 years ago

    where would I be able to find the sales tax information for states that require stationery /papergoods taxes? Is there a partciular website for online business owners? I would like to input these percentages into the zip code ranges . Thanks!

  • ikabags

    IKA PARIS from ikabags said 4 years ago

    Merci !

  • SimpleJoysPaperie

    Lana Manis from SimpleJoysPaperie said 4 years ago

    Thanks for the reminder!

  • paramountvintage

    kristin from blackmoonsky said 4 years ago

    ugh! i am paying taxes for my first time this year and i had no idea i had to pay quarterly. well i love everyone at etsy for writing this article!!! i would love to see a monthly section on paying taxes becaue i need all the help i can get :)

  • solocosmo

    Jessica Grundy from solocosmo said 4 years ago

    I had such a hard time last quarter, my first year in Texas and doing taxes seemed all different! I called the state Comptrollers office and they were actually ridiculously helpful. The guy on the phone walked me through every single step without making it long and confusing!!

  • reflectionsjewelry

    Emily Delfin from reflectionsjewelry said 4 years ago

    I appreciate the helpful advice here - Thank you!

  • peshka

    Peshka from Peshka said 4 years ago

    Excellent advice

  • rzahn

    Randall Zahn from RZahnStudios said 4 years ago

    The reminder is appreciated. It is even easier now, if you check with your state site you can do it all online and it will even do the math for you. Such as in Colorado: www.colorado.gov/Revenueonline

  • storeythreads

    Naomi Storey from StoreyThreads said 4 years ago

    Very good read. Thanks for all the helpful tips! My shop www.etsy.com/shop/StoreyThreads Is just getting started. Id love some in put!

  • hawaiibeads

    Cece from hawaiibeads said 4 years ago

    The payment is actually due on the 17th of September this year since the 15th is a Saturday!

  • bethanedwards

    Bethan Jayne from PiggleAndPop said 4 years ago

    I don't understand why Outright and others say September 15th. I am in PA and I can't make a payment for this quarter until October as September is still part of the 3rd quarter of the year. This goes for every other quarter...you can't pay for something that hasn't happened yet...no?

  • KAYEganda

    Kaye T from KAYEganda said 4 years ago

    In Maryland, I declare my sales and use taxes every month on the 20th

  • ekohaus

    Dovile S from FeltWoolSlippers said 4 years ago

    Thanks for this!

  • RoyalCheetah

    Bella Montreal from RoyalCheetah said 4 years ago

    Thanks Etsy!

  • recycledwares

    Nerrissa W from RecycledWares said 4 years ago

    Are you sure every Etsy store owner needs to file quarterly? I think it depends on how much they make. I've heard the I.R.S. requires anyone who ends the year owing the Government $500 or more needs to make quarterly payments. I don't think everyone falls into that bracket.

  • NikiMadeIt

    Niki Kmetz from NikiMadeIt said 4 years ago

    Eeek this is confusing. Since I started selling on Etsy in 2007 I have made $2704.00 but that's what Etsy says there are still costs of materials and stuff.so thats not my actual income. This year I am at $513 before cost of materials so how would do I figure out how much I need to pay in taxes?

  • Babzdidit

    Barbara Safranski Hart from Babzdidit said 4 years ago

    Very good info. I went to outright and found out I have a net loss for the year....and that doesn't include material costs. Feel pretty safe not filing quarterly taxes, unless they wanna give me a refund.

  • littlehipsqueak

    Amy Richardson from littlehipsqueaks said 4 years ago

    My Q3 is exactly 10 times my Q2. Taxes are an unbearable headache.

  • MomsantiquesNthings

    Janine from MomsantiquesNthings said 4 years ago

    I do quarterly NY State sales tax returns, but according to http://www.tax.ny.gov/ the due date is 9/20/12.

  • PrettyCharmed

    Cheryl from PrettyCharmed said 4 years ago

    Oh, the dreaded taxes! Thanks for the great information!

  • amandolyn

    Amanda from AmandolynCozyCottage said 4 years ago

    Awesome, thank you!

  • greeneyz

    greeneyz from greeneyz said 4 years ago

    But i don't understand ? I just started selling on this site, and I don't understand why they don't set it up to collect any sale taxes from the sales you make from the customers? They just set it up to how to retrieve the money from the customers, but nothing on dealing with the sale taxes that you are should collect in order to pay the taxes that are owed to the IRS. I am really confuse here? I thought this would be like Amazon, where you have to make over 200 transactions and or twenty thousands in sales over a year to pay any taxes your owe to the IRS. I submitted a W-9 Form from Amazon and I don't understand why ETSY is not doing that with the sellers? Can anyone help me understand more clear on this? Can some guide me to a site to get help to understand the new law that we have to pay taxes if we sell on Amazon, ETSY, Ebay and others? There got to be a place that can easily explain all of this. I don't even have seller's permit and I am selling on this site? Very confusing. Any help would be great Michael

  • DontUWantMe

    DontUWantMe from DontUWantMe said 4 years ago

    Great thread - I feel better now - seems the easy way around qrtly filing is to make sure more is taken out of my husbands REAL JOB paycheck... but now I have to worry about failure to file Soc Sec Self Employm - ugh. Calling IRS tomorrow to see what I need to do about that - I agree w/someone elses post that the IRS is actually really helpful when u call them.

  • anothertimeantiques

    Barbara Boyce from AnotherTimeAntiques said 4 years ago

    Sales tax and income tax are two different beasts. Yes NY sales tax quarter is Sept 20.

  • anothertimeantiques

    Barbara Boyce from AnotherTimeAntiques said 4 years ago

    Here's a quote from the IRS PDF (link in article above) General Rule 505, Tax Withholding and Estimated Tax. In most cases, you must pay estimated tax for 2012 if both of the following apply. 1. You expect to owe at least $1,000 in TAX for 2012, after subtracting your withholding and refundable credits. 2. You expect your withholding and refundable credits to be less than the smaller of: a. 90% of the tax to be shown on your 2012 tax return, or b. 100% of the tax shown on your 2011 tax return. after subtracting your withholding and refundable credits. There's lot more info of course - but new sellers and modest income sellers need to realize that the $1000 guide is talking about owing $1000 in taxes and not having $1000 in income (after expenses)

  • nbottles

    Nicole Bottles from FreshSqueezedLymeAid said 4 years ago

    thanks for posting this! wish there were more articles for small business owners in other countries; i live in canada, and am having a heck of a time figuring out the minimum required to pay taxes! government jargon is very difficult to pick through. this article really clears things up for american friends...you're clarity is appreciated!

  • PerformanceColors

    Tiffany from PerformanceColors said 4 years ago

    I was so happy using this application Outright.com. I downloaded it a few months ago and didn't really pay attention to it. I came home yesterday and finally assigned some categories like the shipping so it would match on both sides of the balance sheet. The folks there are fabulous. Who wants to do taxes? This makes everything so simple. Then I just go into each of my vendors and upload my invoices: the date, amount, and a invoice number in the description field and assign it to cost of goods sold. I get a better handle on everything than I ever have before since I can look at the numbers by month or by vendor or by expense/income. Then I just went and paid the IRS online. I just love the fact that someone is helping the small business owner with an easy point and click application. It is really helpful if you have a business like mine which is high volume with low dollar amount. I sound like an infomercial but I really truly detest this time of year. I just like working in the studio. I hope more artists and artisans take advantage of this affordable service so they can get control of their finances and feel same comfort and security I do.

  • sfitzgerald4434

    Sarah Fitzgerald from InkLineDesign said 4 years ago

    VERY HELPFUL - I was just thinking about taxes, but not about having to pay them next week! Thank you for the information, I had no idea this was quarterly!

  • PeacocksandPurls

    Darcilla Olshavsky from PeacocksandPurls said 4 years ago

    so confused and worried.....no sales, have expenses...so do I pay taxes on non-income?

  • VLopez8730

    Veronica Lopez from CopperButtons said 4 years ago

    When do you start paying taxes on your business mainly quarterly estimated taxes. I mean how long do you have to have the business going before you start paying quarterly taxes. For example if I were to start a shop today 02/19/13 do I have to file the taxes on the June 15 due date? Or do I wait to start filing those until April 15, 2014. This is really confusing me and I would really appreciate it if someone could clear that up for me. Thank you for taking the time to read :)

  • URL said 2 years ago

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