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Topic: Does Etsy count as 'self employed'?  (Read 4799 times)
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« on: August 09, 2010 04:45:05 PM »

This is for people in the US, since I live there . . .

I was looking something up on the IRS website a couple days ago, and it says that if you make more than $400 a year selling something - be it handmade stuff or a service - then you have to file taxes as a self-employed business. But I assumed this is only if you have a proper business license and whatnot . . . does Etsy count as being self-employed? I mean, you'd have to sell a lot of crafts to make $400, but I don't want to sell things, make money, and get in trouble at the end of the year.

Anybody have any idea?

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« Reply #1 on: August 10, 2010 07:37:20 AM »

based on that info I'd say it doesn't matter if you have a business license or not if you make that much money you are self employed. I'd also say if you ARE making that much money then you need a business license.
You also should look up your state regulations on self employment. My state has the laws set up so that if you've made a certain amount of money in a year doing anything then you need a business license. it's a lot lower than that 400 dollar amount.
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« Reply #2 on: August 26, 2010 12:04:48 PM »

I've been fiddling with my own stuff for ages and can answer: yes, you are considered self employed if you sell on Etsy.  You may only be making a tiny amount, relative to your 'day job' but it still counts. 

The IRS will want its cut, of course.  So far, it's about 1/3 of your profit.  I suggest getting a decent, small bookkeeping system to track stuff - I've had really great luck with WorkingPoint (www.workingpoint.com) for setting up and keeping simple books.  It's free and can grow with you until you decide if you need something bigger.

Your state may or may not have different ideas about what you need to do.  In Texas, where I am, you do not need a business license to sell your crafts, but you will be nailed to the wall if you do not properly report, collect, and submit State Sales Taxes.  In fact, at shows that I go to, one of the first things that they check at the door is your license - and they may spot check it onsite too.

I suggest that you do a quick google search on your own home city and state, like "Houston Business License" and then give the appropriate authorities a call.  Believe it or not, the authorities are usually very friendly and helpful.
« Reply #3 on: March 17, 2011 05:47:12 PM »

Also check into your deductions.  WI state but deduct anything we spend money of for the business. Such as gas to get supplies/mail a package, supplies for anything for the business. I'd have to double check with my husband but it deducts the total amount of your taxable income.

Check your state laws and call them so that you don't get bit in the butt later.

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« Reply #4 on: May 17, 2011 10:50:47 AM »

You need to check with your state to see if you are required to register as a business to sell on etsy. If so, then yes, you would be self employed even if you did NOT make $400. As a business you are required to report all revenue, but you also get to report expenses. You can safely show a loss of profit for three years in a row. Many new businesses do. So it's not necessarily about how much you make, that would make you self employed.

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« Reply #5 on: May 28, 2011 06:39:36 AM »

Someone needs to change that $400 to a LOT more. $400 is NOT making a living!

« Reply #6 on: July 18, 2011 06:05:21 AM »

I just applied for membership to the craftster team on etsy.  What's the next step?
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