Does Etsy report to IRS?

Etsy reports your gross income to the IRS on Form 1099-K, but even if you don't receive a 1099-K, you must report Etsy sales income on your tax return. If your state has income tax, you must pay state income taxes on the net income from your Etsy sales as well.

turbotax.intuit.com - Selling on Etsy & Your Taxes - TurboTax Tax Tips & Videos - Intuit

Can my Neighbour stop my extension?

In answer to the question – can my neighbour stop me building my extension? The answer is no, they cannot. They can request additional details...

Last updated Apr 7, 2019

Is Fibermesh as good as rebar?

While there are clear benefits to both concrete fibermesh and rebar, there is one option that clearly stands out as the better option to us. This...

Last updated Dec 9, 2018

Can I build my own shed?

Yes, with the right plans you can build your dream shed.

Learn More »

Promotion

OVERVIEW

Selling your kid's old bicycle is not likely to cause any tax consequences, but when you sell crafts, vintage or specialty items on websites like Etsy, you must report and pay taxes on your net income. You will also likely need to pay self-employment tax on your profits, and in some locations, you may also be responsible for charging and collecting sales tax. Paying federal and state income tax on Etsy income If you sell items on Etsy, you will likely need to pay income tax on your income—usually, the total amount you earned by selling your products, less your business expenses. Etsy typically reports your gross income to the IRS on Form 1099-K, but even if you don't receive a 1099-K, you still have to report your Etsy sales income on your tax return. If your state has income tax, you'll need to pay state income taxes on the net income from your Etsy sales as well. Beginning with tax year 2022, if someone receives payment for goods and/or services through a third-party payment network, their payments are required to be reported on Form 1099-K if more than $600 was processed during the year. Those payments can include income as a result of business (self-employed, independent contractor, freelance, gig-work), real estate rental, hobby sales, personal item rental or sale. Deducting business losses from Etsy sales If you sell on Etsy for profit as a business, you can likely deduct business expenses like: Cost of materials Shipping Provided that you Etsy activity is considered a business rather than a hobby, these can be deducted even if they exceed the money your business earned. If your business expenses are greater than your Etsy income, you'll have a business loss from your sales. This can typically be deducted from other income you have—even from another job or business. This deduction can reduce your taxable income. Business expenses if your business is a hobby If your Etsy selling is considered a hobby by the IRS then you cannot take business loss deductions to directly reduce your selling income. For tax years prior to 2018, you can take them as an itemized deduction on Schedule A. For tax years beginning with 2018, you are not be able to reduce your hobby income by any hobby expenses. Therefore, most taxpayers will try to avoid having their Etsy selling being classified as a hobby. You are more likely to avoid hobby classification if you run the operation in a businesslike manner, depend on the income from the business, keep precise business records and show a profit in three out of five years. Paying self-employment tax If your total net income from self employment including Etsy sales is $400 or more, you'll also need to pay self-employment tax on this income. Self-employment tax includes Social Security and Medicare taxes. The amount due is comprised of the percentage that would normally be withheld from your paychecks as an employee, plus the percentage your employer would have contributed. When you're a self-employed individual you're responsible for paying both types of taxes yourself. As of 2022, this means a total of: 12.4% of the first $147,000 you earn for Social Security tax 2.9% of your total income for Medicare If your income is considered a hobby, then it will be subject to income taxes but not to self-employment taxes.

What is a miter cut?

A miter cut simply means that you're changing the angle of the cross-cut from a perfect 90° to a different angle. This angle goes across the top of...

Last updated Nov 2, 2019