Due to changes in tax laws, the income you earn from selling platforms (Etsy, Ebay, Amazon, etc) will be reported to the IRS if sales are over $600. This also includes income you receive through Zelle, Cashapp, or Square.
So how does this effect you? Well, it means you will have to report this income on your tax return, and will likely pay taxes on it. However, there are some important things you want to note, the biggest one being, YOU CAN DEDUCT YOUR BUSINESS EXPENSES! Here’s an idea of what you may be able to deduct.
- Fees (Etsy and Ebay take fees for each sale!)
- Shipping cost
- Packaging supplies (bubble wrap, tape, etc)
- Printer paper
- A scale
- Part of your internet bill
- Product cost
- Part of your electricity.
The list of possible deductions is a lot larger than this. If you know you are going to have more than $600 in sales, make sure you are tracking your business expenses. If you need assistance with tracking your expenses, or completing your tax return, give us a call!