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Etsy U.S. Tax, Bookkeeping, and Business License Topics Are Etsy Fees Business Expenses?

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Original Post

Are Etsy fees considered business expenses and deductible when you fill out your federal taxes?

Posted at 3:15 pm Aug 16, 2012 EDT

Responses

GoTo from GoTo says

Yes. More help for what is and isn't a business expense in the IRS documents linked to from here:

Income Tax Help for Small US Businesses
www.gotogreatpanes.com/blog/income-taxes

Posted at 1:43 am Aug 17, 2012 EDT

^ agree with what GoTo said =)

Posted at 9:56 am Aug 17, 2012 EDT

Great, Thank you!

Posted at 7:20 pm Aug 17, 2012 EDT

GoTo from GoTo says

You're welcome!

Posted at 8:10 pm Aug 17, 2012 EDT

According to my account, etsy fees are part of the cost of goods sold

Posted at 10:20 am Aug 28, 2012 EDT

In my accounting records I list both Etsy fees and Paypal commissions under "commissions & fees" which is basically a professional expense.

Every dollar outgoing on behalf of the business IS a business expense.

Posted at 1:31 pm Aug 31, 2012 EDT

I work with Outright.com and have seen our accountant experts tell Etsy sellers to categorize Etsy fees in "Commissions & Fees."

There's a mention that you shouldn't count them as COGS in this post:

www.etsy.com/blog/en/2010/tax-tips-the-cost-of-goods-sold/

Of course, I'd never tell you to go against your accountant!

The most important thing to remember about expenses is just be sure to record them! Take web hosting for example. We did a blog post a couple years ago about how people categorize Web Hosting all over the Schedule C. Some people put it in fees, some people put it in advertising, etc. As long as you know how much you spent and what you spent it on, you can work out just where to put it on the Schedule C at the end of the year.

Posted at 10:09 am Sep 4, 2012 EDT

For the IRS, etsy fees such as listing fees could be Advertising, or Dues & Subscriptions, or if you want to get really technical, you could make them part of the cost of goods sold. It really doesn't matter. It depends on how you want to analyze your data. Because at the end of the day, the bottom line is still the same and being taxed the same. All of those categories will treat the fee's the same. I break out the etsy fees by "credit card merchant fees", "Listing Fees", etc. so I can get a good idea on what exactly is going into my etsy fees compared to my sales and the percent of income it is.

Posted at 10:47 am Sep 6, 2012 EDT

Thanks everybody, this is a helpful discussion .

Posted at 7:24 pm Sep 17, 2012 EDT

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