Etsy U.S. Tax, Bookkeeping, QuickBooks, and Business License Topics
Are Etsy Fees Business Expenses?
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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:
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 10:09am 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 10:47am Sep 6, 2012 EDT