HOW TAXES WORK for Etsy sellers (Etsy finances explained)
Vložit
- čas přidán 28. 11. 2022
- Sales tax, income tax, self employment tax, estimated taxes, the list goes on... it can all be SO confusing and very overwhelming for an online seller. Whether you're an Etsy seller or sell on another marketplace like Amazon or Ebay, we're covering the details of what you need to know on the financial/tax side of things. If you've been wondering how to start an Etsy shop, this is definitely a HUGE part that you'll need to be able to grasp going into it. In order to sell on Etsy successfully, you have to understand what your financial obligation is as an online seller and how to manage your finances and handle sales tax (and other taxes) in the right way. I was so grateful to Janet LeBlanc, from Paper + Spark, for joining me in this conversation today. She is a certified public accountant and SO knowledgeable about all things taxes, finances, and bookkeeping. I especially love her perspective because she is an Etsy seller herself! In today's video, we talk all things sales tax, income tax, self employment tax, and more. My hope is that this video will help you in understanding finances on Etsy, how to manage Etsy finances, give you clear details on the process for Etsy sales tax, and give you an Etsy shop for beginners tutorial on the financial side. These financial Etsy tips are meant to help you get started the right way and point you in the right direction for your Etsy business.
*NOTE: The content of this video is not to be taken as professional legal/financial advice. You can and should do your own research to determine your financial obligations for your business.
*NOTE: This information is specific to US sellers and not applicable for those in other countries.
✨ MENTIONED IN THIS VIDEO:
➡️ Paper + Spark Spreadsheets: paper-and-spark.myshopify.com?sca_ref=5713900.dBeEHYgV7U
➡️ FREE Get Legit Checklist: paperandspark.com/download-ge...
____________________________
✨ FREEBIES:
👉 FREE DIGITAL PRODUCT MASTERCLASS: www.kate-hayes.com/dppreg
👉 FREE ETSY SUCCESS MASTERCLASS: www.kate-hayes.com/webinar-re...
👉 FREE DIGITAL PRODUCT STARTER GUIDE: www.kate-hayes.com/digital-pr...
👉 FREE ETSY SUCCESS GUIDE: www.kate-hayes.com/etsy-succe...
👉 FREE TREND ELEMENTS CHEATSHEET: www.kate-hayes.com/trendprompts
___________________________
✨ MY FAVORITE BUSINESS TOOLS:
➡️ PLACEIT (Automatic 15% off): 1.envato.market/LPRbVj
➡️ CREATIVE FABRICA (Graphic Design Elements- FREE TRIAL, 10 free items): www.creativefabrica.com/promo...
➡️ CANVA (Free Pro Trial): partner.canva.com/c/3126932/6...
➡️ EVERBEE (ETSY PRODUCT RESEARCH TOOL): www.everbee.io/?via=kate
➡️ CREATIVE MARKET (Graphic Design Assets, Fonts, Mockups, etc): www.tkqlhce.com/click-1009603...
➡️ CONVERT KIT (EMAIL PROVIDER): partners.convertkit.com/c14ns...
➡️ KAJABI (Course Hosting Platform, Email Marketing, Landing Pages, and more, FREE TRIAL): app.kajabi.com/r/e8JFEaLi/t/l...
➡️ PRINTFUL (POD PROVIDER): www.printful.com/a/katehayes
➡️ EPIDEMIC SOUND (Copyright-free music and sound effects- free 30 day trial): share.epidemicsound.com/t1f64g
➡️ Shopify (free trial): shopify.pxf.io/LX4amM
👉 OPEN YOUR SHOP AND GET 40 FREE LISTINGS HERE: etsy.me/3i4VrSK
👉 WATCH THIS NEXT (ETSY PLAYLIST): • Etsy
👉 SUBSCRIBE HERE: / @katehayes
ALSO, make sure to tap the BELL 🔔 icon to turn on your notifications- that way you won't miss any of our value-packed videos!
***SOCIAL:
✨FACEBOOK: profile.php?...
✨INSTAGRAM: / katehayes.co
We love sharing our story and the way we've found success with you. Of course, I can't talk about this without giving Jesus the glory. We work hard with the tools we have but ultimately HE is the one who has brought in every order. "In their hearts humans plan their course, but the Lord establishes their steps" -Prov. 16:9
➡️ PRODUCTS THAT MAKE OUR WORKFLOW EASIER:
LIGHT BOX KIT: amzn.to/3gUIx8g
DYMO LABEL PRINTER: amzn.to/33TeIBr
DYMO LABELS: amzn.to/2EapzvU
SHIPPING SCALE: amzn.to/320LmhQ
📸 MY GEAR:
+ Canon M50 Kit: amzn.to/2DMfy88
+ Joby Gorillapod: amzn.to/3imSxHS
+ UBeesize Tripod: amzn.to/3fEkCbP
+ Lighting Kit: amzn.to/3mXb7Mt
+ Soft Box Diffuser: amzn.to/3jvYdTs
+ External Hard Drive: amzn.to/3gWcwwZ
➡️ For business inquiries: collab@kate-hayes.com
We are affiliates for some of the brands mentioned on the channel. As an Amazon Associate and affiliate for other brands, I earn from qualifying purchases. I only recommend products I actually use, love, and think you would benefit from.
🎥 FREE MASTERCLASS (My 5 Pillar Etsy Success Formula) 👉🏻 www.etsymasterclass.com
What we do for taxes is that every time we get paid for a project, we put 20% on the side, and that helps a lot.
Thank you so much for having me Kate! I hope everyone found our chat helpful :)
Very helpful! A Big Thank you! 👏🏻
Thank you so much for this video! It was very informative! Do I need to have a sales tax permit although Etsy and Amazon are collecting the sales tax for us? Also is it correct in saying that with Etsy and Amazon they setup and collect sales tax for us and with Shopify we set it up and they collect it? Thank you in Advance!
I just watched the video and was so impressed. Thank you both for this great discussion. Janet...I wish every accountant were as clear and precise as you are! Thanks!
Just found your video - i so needed it. Are credit card line items on statements not sufficient? Do i need the actual receipt?
This is awesome! Definitely a must watch for Ecommerce sellers! Sales Tax can be quite confusing but you explained it really well! Great job!
Thank you, friend!
Thank you so much for this wealth of information! I have been searching high and low trying to find out how to file a sales and use tax return without paying taxes on my etsy sales! this is exactly what i needed!
This video is amazing! Rewatching for a 2nd time and will keep coming back to it as I am researching for my art shop I want to launch. My only feedback would be that adding chapters/timecodes on the video would make it a lot easier to rewatch for specific information (since there is so much great content included!). Thanks to both of you for providing such important info in an easy to understand way!
Thank you for the encouragement and feedback. Glad it was a help!
Thank you for this video, Kate. Janet shared so much valuable information! I sold on Etsy 9 years ago when it was easier. The new rules and regulations are understandable but also a bit discouraging. I'm bookmarking this to refer to again.
I agree- it can definitely be discouraging because it can be so hard to understand! Glad we’re able to provide some clarity on this subject :)
Wow! Finally someone helping to explain the taxes! Thank you soo much 👏🏼👏🏼
Isn’t she brilliant?? So happy this could help you! 😊
Great information, thank you. I will definitely rewatch again. Great job on this video.
So glad you enjoyed it! There’s so much great info, it’s definitely worth a rewatch! 😊
Thank you so much for this video! It's extremely informative!! 👍
You’re so welcome friend!! 😊
Great Video Kate thanks for all your Help Truly appreciate you. Thank you Janet as well.🥰
Very welcome, friend! Glad it was helpful!
This video is so helpful, thank you!!
So happy to hear that friend! 😊
Thank you for the info . Great video !!
You’re very welcome! Happy to help!
What a useful video! It clarified so many things. Thank you, Janet for such a great explanation of such a difficult topic. You just made understanding sales tax a lot more simple. Any chance you could sell the spreadsheet but for print on demand sellers that use Etsy? Also, what happens with sales to Europe and VAT?
Thank you Kate for this video. I Really appreciate it. I hope you have a Happy Christmas and keep uploading your amazing videos. They are very helpful for people like me who are starting out and feel overwhelmed by so much information. Thank you! 👏🏻👏🏻👏🏻
Thank you friend! Glad you enjoyed it.
This was AMAZING!!!! Thank you so much
Your welcome, friend!
This was sooo helpful!
Great video! If you have her on again, I’d love to hear what she says about how to pay yourself !
Thank you so much for all the info. This helped me understand a lot
You’re welcome!
Thanks for posting this tax information video.
Happy Holidays
You’re very welcome!! Same to you! 🤗
Wow, accurate and clear, very good content!
Thank you! 😀
Very informative. I would like to know if possible about the sales tax part. Do I include that part when I prepare my federal taxes. I know other platforms it is taken out before and I do not worry about it. But I read that when etsy does your gross it will include it for you so therefore we must deduct it. Do we deduct it before or add it to the taxes when we are deducting fees etc?
This is great information...I was going to ask if Etsy remits tax for us. I strongly dislike talking taxes but I watched to the end.
I agree, I strongly dislike talking about taxes, like it literally makes my heart rate go up and the one tax that infuriates me to no end is property tax. I don't understand that one at all, it's like I already bought this thing, I own it, it's my name on the title but the government still wants money for this thing that is supposedly mine and they can take it away if I don't pay that yearly tax on it but it's "mine."
Thank you so much for all the helpful info, but I just wanted to be extra clear about some things that have been confusing me. So if I don't think I'm going to reach that $1,000 in taxes but my shop suddenly takes off do I start making payments in the next quarter, and then make up the rest at the end of the year? Also, when do I fill out schedule c? I know you said with regular income tax it's April, but if I'm making quarterly payments do I turn it in when I first start making them, or before each new payment to reflect profit or loss for each quarter? I've been trying to google it but came up empty.
Thanks for this!! I'm Canadian, so most of this won't be the same for me, but I still wrote down a bunch of notes!! I now know where to start for my Etsy taxes :)
Glad this was still helpful for you! :)
It should be clarified that the word "make" is not on the Schedule C or the 1040. It is called Adjusted Gross, which is the amount if profit. It is income - expenses= adjusted gross income. I'm not a CPA. We farmed for 29 yrs and this is the terminology. Just an FYI.
Sales tax is a nightmare, going to Etsy to get it taken care is half the reason to be there now. Don't like the competition within Etsy but hearing that they handle all the individual sales taxes is huge. 28:07
I have a resale certificate for print on demand...but might not be able to keep it if I don't meet the minimum..Tn..so might have to start paying that as well as for any supplies
Hi, thank you for information. I have a big question. I’m going to launch a shop with my friend. But we have not registered as LLC yet, actually we are not in a situation to do that. Is there a way both of us can split the tax between the two?
Hi! Beautiful Kate, I loved watching your video, I learned so much and inspires me a lot to about to have a hope of never ending on learning for a goodness purposes. Just like me I lost my Job locally here in my country in the philippines as an Operation Manager in my currently due to pandemic attacked us last 2020. I am now practicing designing all kinds of logo and others which is related in design so that I can find a job online after this if could be able do some more design, especially I need it to master then.
Hi friend! I’m so sorry for the struggles you’ve had to face over the last couple of years. It sounds like you’re doing a great job of learning some new skills to try a different direction in the future- way to go! Love that resiliency and determination. I’m cheering you on!! 💛💛
So, if I understood all this and THANK YOU for laying it all out… an artist making custom portraits, Etsy will collect and remit sales tax, Printify will charge me CA sales tax for the hoodie that art was printed on and I still need to register and report to Arkansas even though Etsy handled the sales tax for my digital product?
Thank you Kate! Can you tell me if Etsy hold the payments from your sales until you update your TAX ID? Or can they still be deposited to my bank with this information pernding?
If you decide after that 1st quarter estimated tax due date tgat you should be paying in quarterly can you start the 2nd quarter with your estimated tax for self employment?
Great video,Kate! I’ve a quick question. Is it absolutely necessary to put your real name in first and last name while opening an Etsy store? I have a full time job and don’t want my colleagues to know that I am selling on Etsy. So I am wondering if I can use a pen name instead? Or for example if my store name is “XYZZ gifts” then can I put XYZZ in first name and Gifts as last name while opening my Etsy seller account?
We would recommend at least putting your first name, but your last name is not necessary!
Can i just keep track of my finances with a notebook or do you have to use quick books?
I have a question I’m about to fill out my dba application ..o don’t k is what to check off where it says what type of business ..do I put retail or wholesaler or other ..I’m going to open a etsy shop and Shopify to sell shirts ..tumblers..things of that nature ..please help thanks
This is such a great video. Quick question: Do I need to save every receipt to justify my expenses, or do I just need to keep track of them? Would someone ever ask me to present my receipts?
Definitely a smart idea to have them just in case- you can either save them physically or digitally (snap picture of each one, scan in, etc)
Can you get money back when filing a business tax just like you do when you work as an employee?
So I am registered in my state and report zero ....and Etsy remits the tax. But, I noticed Etsy charged for out of state sale ..on my behalf..? So, that's Etsy's marketplace tax..and I don't need to do anything with that? Just want to make sure.. Thank u..
Hi, is there a way to print a monthly statement on Etsy with my name on it to show proof of monthly income?
Hi, I have a question. I read that if I make less than $400 in a side hustle I dont need to report to IRS. I also read that if I have a job plus a side hustle I must report my side hustle income no matter is less than $400. Im confused. Do I need to report that money if it is les than $400?
Question: so for tax deductions on supplies you purchase for your shop, how do you deduct them if you don't have the physical receipt, like from an online purchase or something? Say I purchased a craft supply from somewhere like Temu (which as far as I can tell doesn't show a receipt), how would I file that?
Your bank account. The transaction
@@nildadel9795 thank you, so the IRS just believes you bought what you say you bought even though it doesn't say what you purchased on the statement?
@@mizzourita3896 it has to show what you bought.
All receipts shows what item you bought!
You can’t show you grocery recipes to prove you have a painting handmade businesses.
What if I'm a seller not from America? Does this info relate to me?
Awesome video! I have an additional question...I currently work a 9-5 with a typical W-2 paycheck. I opened a print on demand store on Etsy in May, and I also started freelancing on the side on Fiverr and in a part-time contract job. Would I lump together the Etsy store, the money from Fiverr, the money from the contract job, and subtract all the expenses for each thing together all in one Income tax form? Or would I need to file separate forms for each?
I have products for etsy .i need account can you please help me out
Hi Carolina, all of these activities would likely be reported with your personal taxes, but you may lump all the business activities together on one Schedule C, or you may file a separate Schedule C for each activity (Etsy store, freelancing, etc.). It really depends how related/unrelated the activities are. If you're basically working as say, a graphic designer in all 3 activities, then you are probably fine to lump it all together on one Schedule C.
For POD you van get a resale certificate, that way the item being sold is not being double taxed.
This is what I was about to ask. Are there any other requirements to have the certificate? You can just use it to avoid paying taxes to the POD shops? Thanks!
Hi do you know if i have to collect sales tax to US if im based in Europe? 50% of my customer base is in the US. I make around 800-1000$ per month from my customers in the states. I sell digital files for personal use
I am looking for a specifik digital file: what’s your store name?
I wanna open an store in etsy and wanna sell my handmade hair mask from UK what taxes and charges does etsy charge for this plz guide
Hi I have a question I am just setting up my Etsy ..I’m at the part where it says individual or business…I have a dba and an ein but NOT an LLC ..which do I list myself as business or individual? Ty
www.etsy.com/mx/seller-handbook/article/45727872134
This article may help you with your answer. Seems like you are a sole proprietor, but this may help you determine that and figure out which option is appropriate.
@@KateHayes Ty so much
what about quickbooks? I am looking into what is the easiest way to track finances.
Quickbooks isn’t a bad option, but I do feel it has a bit of a learning curve. I personally think Paper and Spark’s spreadsheets are easier to use and more affordable than a membership to quickbooks :)
Do you have answers for non Us citizens?
Thank you so much for the freebie!
Very welcome!!
Nececito protección
GoDaddy, Quick Books
If you make more than $7000 profit, you’ll probably owe $1000+ unless this is your only income.
Hi, Kate Can you visit my store and help?
MinimalistJewelryy