Etsy Tax Reporting
Etsy reports your total gross sales processed by Etsy Payments to the IRS, not profit or tax liabilities, if you reach over $20,000 USD in gross sales and over 200 transactions in 2023. Etsy will send you a 1099-K form to use when filing taxes for 2023.
Setting Up Sales Tax on Etsy
To set up sales tax on Etsy, select Payment Settings under Finances. You can set tax rates for states and zip codes if your state has local sales tax. Review each state’s requirements for sales tax, as states differ in tax rules. Ensure you charge sales tax to buyers after your Etsy shop goes live.
Etsy Fees and Security
Etsy fees include listing fees, selling fees, payment processing fees, and a 2.5% currency conversion fee if shop and bank currencies differ. Etsy collects sales tax, VAT, GST, or HST in some cases. The selling fee applies to those taxes, but the transaction fee does not.
Create a strong Etsy password with letters, numbers, and symbols for account security. Contact Etsy regarding any account issues. Consider if Etsy fees make selling worth it, as the site provides a platform to sell goods.