When filing income tax, do I have to report etsy earnings?
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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 12:19am Feb 5, 2008 EST
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 12:24am Feb 5, 2008 EST
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 12:32am 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 12:33am Feb 5, 2008 EST