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When filing income tax, do I have to report etsy earnings?

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Original Post

When filing income tax, do I have to report etsy earnings? I didn't know where to look for help, so maybe someone in the forums can answer! This is the first time I'm filing my own taxes (and 2007 was the first year I started listing on etsy) and while putting in my earnings, it has a section for other types of earnings for work-from-home types of things. I can't have TurboTax help with my questions on that unless I pay for the upgraded version, and I don't want to upgrade just to find out I don't need to report it.

I haven't earned very much on esty so far, so I was just wondering if other people have filed it with their taxes (and if so, what info would I use?) or if it doesn't matter.

Posted at 12:19 am Feb 5, 2008 EST

Responses

Yes, you are supposed to report it as income. If you want to be able to deduct your business expenses (supplies, shipping costs and materials, etc) then you file a Schedule C, which means you will have to upgrade your Turbotax version. I use the deluxe.

Posted at 12:24 am Feb 5, 2008 EST

jendaby says

I thought it was only after it went beyond a certain amount. Wow, so far I have spent everything I earned on Etsy buying things from others on Etsy. I hope I don't now have to pay taxes for it. Bah. :(

Posted at 12:28 am Feb 5, 2008 EST

yes you should be filing Schedule C and SE(if required) with your 1040

Posted at 12:29 am Feb 5, 2008 EST

you should be keeping track of all your sales, and all your business expenses. and have all the receipts as proof, and everything you should be saving for 7 years

Posted at 12:30 am Feb 5, 2008 EST

even if your profit was only $100 you have to file the schedule C and claim it. and BTW trades count as sales

Posted at 12:32 am Feb 5, 2008 EST

quirkybags says

jendaby says:

I thought it was only after it went beyond a certain amount. Wow, so far I have spent everything I earned on Etsy buying things from others on Etsy. I hope I don't now have to pay taxes for it. Bah. :(

----

You have to claim whatever you made selling at Etsy (and elsewhere), regardless of what you spent it on. If you invested it in business supplies/advertising, then you detail that on your schedule C. If you made more than $400, you have to pay self employment taxes.

Posted at 12:32 am Feb 5, 2008 EST

You haven't said where you are in the world, but I'm assuming the US. In which case I'm sure I've read other sellers saying that that there are criteria that your taxation office uses to determine if you are carrying on a business or a hobby - that's certainly the case where I am and if you're a hobbiest here you don't need to report the income.

You should do some research online and see what you come up with along those lines.

Posted at 12:33 am Feb 5, 2008 EST

Okay, thanks tilley and artisan.

jendaby - I know for a regular job, if you earn under a certain amount you don't have to file.

Posted at 12:33 am Feb 5, 2008 EST

also everyone here should be registered to collect and remit sales tax in their state, for sales to customers in their state

Posted at 12:33 am Feb 5, 2008 EST

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