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FidosFlowers
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Hi all,
Tax season is here in the United States and we know that accounting and bookkeeping can sometimes be time-consuming and challenging. We want to make sure you’re set up for success so we’ve partnered with Intuit to bring you QuickBooks Self-Employed and now, TurboTax Self-Employed. Check it out now in your Shop Manager (or here’s a shortcut to see our QuickBooks Self-Employed deal)! We’re also bringing in a tax pro and a tax support specialist to answer your burning questions.
This week, Stacey, a CPA from Intuit (the people who make QuickBooks Self-Employed and TurboTax Self-Employed) and Rebekkah from the Product Support team are here to help! What questions do you have about prepping for tax season in the US? Wondering what you can deduct?
Here are the Q&A details:
- Share your questions in this thread from now until Tuesday, February 4. We will close the thread that evening at 9pm ET.
- Our partners at Intuit and Etsy staff will answer questions by 5pm ET on Friday, February 7.
- We probably won’t get to all your questions, so be sure to read through what others have asked before posting your own. If yours has already been asked, give it a “Like”! We want to make sure we answer the questions that matter most to you, so we’ll prioritize the questions with the most “Likes”.
And a few housekeeping notes:
- Stacey is a Certified Public Accountant and an employee of Intuit, not Etsy, Inc. Please note that the information provided in this Q&A is for informational purposes only, and is not intended to be a substitute for, provide or be relied upon for professional tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors concerning the application of tax laws to your particular circumstances. Participating in this Q&A does not create an accountant-client relationship in any manner.
- We can only answer questions about how Intuit's products can help with your finance, bookkeeping, and accounting needs. Please remember that all comments should remain on topic and in line with our community policies. Any comments that violate our policies will be removed.
Thanks, everyone. We look forward to answering your questions!
Accepted Solutions
FidosFlowers
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Thanks for all your thoughtful questions, folks! I’m going to go ahead and close this up now. Stacy and Rebekkah will answer as many questions as they can by Friday at 5pm ET.
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Hi, I’m Stacy, a CPA and tax expert for TurboTax with 10+ years of experience as a tax pro. When I’m not doing taxes, I’m shopping on Etsy for my favorite jewelry, or designing pajamas for my dog. Thanks for all your questions!
WetxPaint
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My name is Rebekkah, and I work on Etsy's Product Support team. Part of my role includes working closely with Etsy's support and tax teams to assist sellers with tax related questions. I've been at Etsy for over 7 years now and I LOVE to shop on Etsy. One of my favorite purchases has been buying matching dog sweaters for my two yorkies, Grady and Guardian. I'm looking forward to helping sellers with their questions!
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@DesignsBySherriAnn wrote:I want to add to this question, how do I prove to the State of Indiana on my tax return for sales tax that Etsy submitted that sales tax for me and that I do not owe it. I see they collected it in fees, but I have no proof to show to the State of Indiana that it was actually submitted so they could tell me that I owe it unless I show proof is this correct or am I wrong?
Hello! States require marketplace facilitators to provide periodic (usually monthly) reports to each of their marketplace sellers that includes the total sales made on their behalf and tax collected and remitted. Facilitators do not generally provide proof of filing and there is no place to include that on the seller's sales tax return. The monthly reports provided by Etsy can be used as proof to the states if sellers are questioned.
WetxPaint
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@PapyrusPatty wrote:I also have a question regarding Sales Tax. Because I am in New York I must have a business license with a Sales Tax ID. If I'm understanding the Etsy correctly, they will be paying the sales tax collected from NY sales. However, because I have a business ID, will the State of NY claim I'm not paying sales tax and then I will incur fines? Am I suppose to give Etsy my ID # so this doesn't happen? When I call the state I cannot get an answer from anyone as they don't know. Thanks for your response.
Hi @PapyrusPatty! As of June 1, 2019, Etsy is responsible for collecting sales tax on orders shipped to buyers in New York. We do not currently offer the ability to add nor do we report the sales tax we collect with a seller's specific tax number. Since this law applies to online marketplaces, we will fulfill any reporting obligations outlined by the new legislation for said orders. The law makes it our responsibility, which means it is not something that you need to worry about yourself. However, keep in mind that sales made off Etsy do not fall under Etsy’s responsibility.
WetxPaint
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@brizelsupplies wrote:What happened to my post? My original post was longer...
Basically, I'm looking to find out when we will be able to receive from Etsy receipts for fees paid to them (listing, transaction, processing) as well as sales taxes which our clients disbursed to our business which Etsy has deducted from our accounts and yet- no information is shown in our Payment Accounts regarding these sales taxes.
Thanks for your questions on fees and sales tax!
To view your fee information, we offer monthly statements and CSV files. You can view your fee information in your Payment account under Shop Manager > Finances > Payment account. At the bottom, you can click to view all your monthly statements.
When viewing a monthly statement, you also have the option to download a CSV spreadsheet of the information to help with your tax filing. These statements and CSV files instead all the fee activity (listing fees, transaction fees, processing fees, service costs, etc) for your shop.
It is true that we don't display tax that Etsy collected from your buyers directly in the Payment account or on our CSV files. We're looking into ways to improve this experience! In the meantime, you can download the monthly statement CSV and subtract the "fees & taxes" and "net" values from the "amount" column. The difference will be the tax Etsy collected. You can also confirm the tax amount on the order receipt page.
For example, if you have a sale "Amount" for $10 with a "Fee & Taxes" amount of $1 and the "Net" says $8, Etsy collected $1 in tax on the order.
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@angelaanimates wrote:I also have a question about sales tax. I'm confused on how to submit/ do the math when filing my quarterly sales tax since not every order has sales tax applied.
Hi, @angelaanimates ! The amount of sales tax that is due is based on the dollar amount of taxable items you sold, regardless of whether sales tax was applied at the time of the sale.
WetxPaint
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@SugarbutterfliesHi
I am looking for a break down of:
product income/etsy sale fee/shipping credit/renew fee/shipping paid/refunds
That I can get from Etsy without going to buy Quick books
Lisa
Hi Lisa!
We offer the following CSV spreadsheets, which contain your sales and expense data, to help with bookkeeping and tax reporting:
Orders: This file will give you the sales completed in your shop, regardless of payment method. It's especially helpful if you accept payment methods other than Etsy Payments, for instance payments by mail or "Other." It also includes sales tax collected, shipping cost amounts charged to buyers, and Etsy Payments processing fees.
Etsy Payments: This file will contain all of the Etsy Payments sales completed in your shop, including orders that have been refunded and canceled.
Download your Orders and Etsy Payments CSV files by going to Your Account > Shop Manager > Settings > Options > Download Data (https://www.etsy.com/your/shops/me/download). Select the type of CSV file from the dropdown under the Orders section. You can download the file either by month or year and save the file to your computer.
Monthly Statement: Includes all Payment account activity for each month. This is best for looking at info like refunds, fees, deposits, etc.
Go to Your Account > Shop Manager > Finances > Payment account (https://www.etsy.com/your/account/payments). Scroll down and select the monthly statement you want to view. Choose "Generate CSV" on the right. You will receive an email when the CSV file is ready.
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@EstambresCom wrote:We are utilizing different marketplaces to sell our products, Etsy, Ebay and Shopify. From everything I have gathered, we should be concerned with the 200 transaction that forces us to pay taxes in the state. Now I also understand that Etsy and Ebay sellers don't need to worry about paying these taxes, since both these platforms are charging them and remitting them.
Now my question is, do we have to count the transactions that were made in Etsy and Ebay (even though they're getting paid already) to know if we have an economic nexus in the state?
Hello! You have to count every transaction in the state to determine whether you cross economic thresholds, regardless if you collect and file on your own, or if Etsy, Ebay, or another marketplace facilitator collects and files on your behalf.
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@PortalsFromThePast wrote:The most vexing is the accounting of inventory. I sell vintage jewelry and I keep my cost basis on a spreadsheet by individual items. I also use this for sales information. When I purchase new items I first book them to purchases for resale (dr) and (cr) my checking account. When I sell them I account individually, including my purchase cost basis, Etsy fees, my shipping cost, any shipping or other income and the buyers purchase price. Then I reclass my cost basis from purchases for resale(cr) to inventory (dr) and(dr) cost of goods sold and ( cr) inventory. Am I doing this correctly or is there an easier way?
Thanks for your help.
Lindsay
Thanks for your question, @PortalsFromThePast ! For the most part yes, you're doing it correctly. However, you can exclude one step which might make it a bit quicker. Instead of entering (dr) purchases for resale when you initially purchase your items, you can go straight to entering the purchases to inventory (dr) and (cr) your bank account. Then, when you sell the items, you will (cr) inventory and (dr) cost of good.
WetxPaint
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@ReImagineBrewing wrote:When I looked into AND CALLED QuickBooks to discuss which version of QuickBooks would work for me I was quite confused and frustrated. The least expensive version is not a good solution for Etsy sellers...
-Etsy pushes and partners with QuickBooks Self-Employed ($15/month). I paid for this, started to use it and stopped because it doesn't work for Etsy sellers. I does NOT allow for inventory tracking or cost of goods. It was a waste of time and money. Then when I went to try to upgrade, QB Self-Employed was a different team than the other versions and a nice easy quick upgrade from this version to a "premium version" was not possible. I had to start from scratch.
-To be able to Track Inventory( products & cost of goods) you have to upgrade to QuickBooks Plus $70/month. This version doesn't integrate with Etsy in the same way making it more work for sellers.
***So, why are Etsy and QuickBooks suggesting a version of the software that can't track inventory(which all but digital sellers have) and why are Etsy and QuickBooks not working to integrate as easily as they do with the $15 QB Self-Employed with the $70 QuickBooks Plus or another upgrade? I find this very frustrating I have to pay more for something that does not integrate as easily with Etsy when the most expensive version really is what Etsy Sellers with Inventory need. Are you planning to upgrade Self-Employed to include inventory management or integrate Etsy better with a premium version. (coming from someone that spent 5+ hours on the phone with QuickBooks)
**I did ask these two questions last year and the questions were not answered. **
1-Is inventory going to get added to Self Employed
2-Is Etsy going to be integrated as good as it is with Self Employed QuickBooks Plus, the only inventory control QB option? Currently, it is a lot more work to integrate with more expensive versions.
Thanks for sharing your thoughts, Andrea! We don't have any immediate plans to make changes to our current partnership with Intuit. However, we appreciate you letting us know that inventory tracking is very important to your business. We will keep your feedback in mind as we consider future improvements.
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@WesternDust wrote:How do I know what I owe in taxes? New business owner that just started on Etsy mid-2019. Haven't made many sales but thought that Etsy took out sales taxes and what I owed for me? Any advice and information on where to find forms and what I owe is greatly appreciated. Certainly looking into TurboTax for this upcoming year of sales. Thank you!
Hello there! Etsy does provide this service depending on the state and date of sale. Refer to this page for the state and date Etsy starts to collect: https://www.etsy.com/seller-handbook/article/marketplace-sales-tax-where-etsy/321914904041
WetxPaint
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@SweetAvasPaper wrote:Why are my numbers on my 1099 different from my monthly CSV?
Hi there! If you're looking for your gross total for the year, which includes expenses you later deduct on your tax filing, download your Etsy Payment Sales CSV and tally up the "gross" column. This CSV file also includes data on expenses, such as shipping costs and refunds, for your Etsy Payments sales. Keep in mind that for 2019 we also only issued one form to sellers, even with multiple shops. If you have multiple shops with the same taxpayer information for 2019, you'll need to download this CSV file from each shop and calculate the gross across all of them.
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@SewSoDarling wrote:my question is about sales tax. As of Jan 1 2020, Etsy is now remitting sales tax to my state on my behalf (IL). I am still required to file a sales tax form to my state but I don't know how to fill it out anymore since I will not personally be remitting the funds.
Hi @SewSoDarling ! You are still required to complete your sales tax returns as you previously did and will include all non-facilitator sales. In the payments made section of your sales tax return, you will indicate the payments made directly on your behalf by Etsy. You can generate a CSV file in reports under your Etsy account.
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@UptownGirlGallery wrote:I am not receiving a 1099 as I did not sell that much. I printed my CSV and am trying to make sense of it. I have calculated the column totals. What do I need to calculate that is not shown on the CSV form? Thank you.
Hello! Your Etsy CSV will include the following data.
Orders: This file will give you the sales completed in your shop, regardless of payment method. It's especially helpful if you accept payment methods other than Etsy Payments, for instance payments by mail or "Other." It also includes sales tax collected, shipping cost amounts charged to buyers, and Etsy Payments processing fees. (This is your gross income, for example if someone returns an order and you pay them back their money this will not deduct the amount from your gross amount)
Etsy Payments: This file will contain all of the Etsy Payments sales completed in your shop, including orders that have been refunded and canceled. (You can compare this amount with your gross income amount and calculate your returned and cancelled sales. These incomplete or cancelled sales must be deducted from your gross income as you do not have to pay taxes on these amounts)
If you sell on Etsy for profit as a business (you intend to make a money), you need to calculate your ordinary and necessary business expenses because you can deduct them on your taxes. (Your business expenses can be deducted even if they exceed the money your business earned)
Some examples of expenses include: your cost of materials, your advertising expense (If any), your shipping costs, your storage costs etc.
However, if you have not turned a profit in at least three of the prior five years, the IRS will categorize your business as a hobby. If your business is considered a hobby you still report the income (on Schedule 1, line 8) but you do not need to calculate your deductions because IRS does not allow you to take these deductions.
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@TwirlyDelights wrote:Does paying the income taxes of the previous year count as a deductible? I'm guessing not, but figured I have nothing to lose by asking.
Do all fees (transaction, advertising, listing) count as deductibles as well as cost of materials?
Hi @TwirlyDelights ! If you paid income taxes to the state during 2019, you may be able to deduct those payments as an itemized deduction when you file your taxes, if you qualify to file Schedule A. Note that the state and local taxes deduction is capped at $10,000.
Transaction fees, advertising and listing fees can be deducted from your business income as a business expense. Cost of materials are included in determining your inventory costs.
WetxPaint
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@SeaSideCreations1 wrote:If I have two shops on Etsy and one of them exceeded the $20000 but the other did not, shouldn't I still get a 1099 form for both since my total is over $20000? I only received one for the business that exceeded the total but not both. What should I do? I tried to email Etsy's help center but have not received a response as of yet.
Robin
Hi Robin - happy to explain! As of 2019, if you qualified for a 1099-K form, we will only issue one form with the combined gross totals from all your shops with the same taxpayer information on file. This is different from past years when we issued a form for each shop with a combined total over the qualifying thresholds.
For example, if in shop A you grossed $10K and 150 payments and in shop B you grossed $15K and 200 payments, we issued one 2019 1099-K form with the combined gross totals of $25K and 350 payments.
If you sign up for electronic delivery, you can access this form from any of your shops under Shop Manager > Finances > Taxpayer ID.
Thank you for your question!
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@EmilySnazzyBoutique wrote:I have 2 questions -
How can I deduct space in my home for my business? What are the guidelines for that?
And the same for use of a computer, phone and printer that is used for other purposes as well - how can I deduct the usage of them?
Thanks so much.
Hi there @EmilySnazzyBoutique ! You can deduct your home office expense if you meet the following criteria:
1) You must use a portion of your home exclusively and regularly for your business
AND
2) Your home office must be either the principal location of that business or there is no other fixed location where the taxpayer handles the administrative tasks of the business.
There are 2 methods to choose from to calculate your deduction. 1) allocate your home expenses to the % of the SQ FT used for business. 2) Simplified method of $5 per square foot with a maximum of 300 square feet.
TurboTax will walk you through the home office deduction methods and optimize the one that gets you the biggest deduction.
If you use your computer, home printer and telephone for both personal and business purposes you can calculate how much of it was used for your business and allocate the expense by that percentage.
WetxPaint
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@SoManyYears wrote:Etsy remits sales tax on our behalf.
The state we live in, including city tax?
Do we still need to remit tax to the city where we live on in state orders?
How does that affect the way we report those taxes?
Thank you
Hi @SoManyYears! Thanks for joining our Q&A. Check out my reply here. This tax collection is Etsy's responsibility, and the state will raise any concerns with Etsy, not the individual seller.
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@OurOldiesButGoodies wrote:Hi, my question is about items that we inherited, that I am selling in my shop.
Our shop is made up of items inherited from both of our families. We do not purchase items at estate sales, auctions, etc. to resell. I already understand that you should use the fair market value at the date of death. But I find that very hard to do for so many items and ones that are not very valuable. After much research, we tend to price our items at the lower end of market value. Nothing is valuable enough to warrant paying for an appraisal.
My question is: Do we need to pay income tax on inherited items we are selling at or below market value??
Hi there @OurOldiesButGoodies !You have to pay income tax on inherited items based difference between market value on date of death and the selling price, even if the market price and selling prices are low. For example, if the market value of the item is $5 and the selling price was $7, there is still taxable gain of $2 that is included in income on your tax return.
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@My1of1 wrote:I’m new to this Etsy Tax season thing since I’ve only been active since last year in April but only made a few sales. I have 3 questions.
How do I know if I need to do taxes for Etsy?
Do I have to do it through you guys, can I do it with my local place where I do my taxes? If so, does it matter that it’s not the same company?
Thanks for your question @My1of1 ! Sales that you make through Etsy should be included on your income tax return. TurboTax Self-Employed will report all your income sources from Etsy and any other personal income.
The way your Etsy sales are reported will depend on whether you consider your Etsy activity to be a hobby or a business. If you are casually selling products on Etsy and it is not your main source of income then it’s likely that your activity is a hobby. Income from a hobby is reported as Other Income on your personal income tax return. Expenses associated with that hobby are not deductible (i.e., not reported on your personal income tax return).
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@Spinningginnys wrote:My question is that I just started selling again here on Etsy, I haven't made any sales on here yet. Nor have I made any sales on my website, but I did make a sale on E-bay last month with sales tax taken for Ohio and I live in Mass. How do I report this and do I send the tax or does E-bay?
Hi @Spinningginnys ! E-bay allows you to set up a tax table, apply it to your listings and adds the sales tax to the buyer's total upon checkout. Depending on the state and date of sale, E-bay will calculate, collect, and remit sales tax on behalf of sellers for items shipped to customers in certain states. For Ohio, Ebay began collecting and remitting sales tax on September 1, 2019. https://www.ebay.com/help/selling/fees-credits-invoices/taxes-import-charges?id=4121
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@DarkHorseQuilts wrote:I'm considering TurboTax to file my Etsy business taxes. Previous years I have done it through my regular accountant because of a partnership. This year I am a sole practitioner. Can I use TurboTax instead of filing with my personal taxes? I'd rather keep them separate unless there is a benefit to my regular personal taxes. No real income this year since I was building my inventory. Thank you for any info.
Thanks for your question, @DarkHorseQuilts ! TurboTax Self-Employed will report all your income sources from Etsy and any other personal income like wages and interest, all in one filing. The 1040 tax return captures all your income sources including self-employment activity, they are not filed separately.
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@AnchorRoadVintage wrote:I have a similar, but not the same question as @OurOldiesButGoodies above. My items are a mix of personal (not inherited!) items and estate sale finds that I have more recently purchased.
Do I report all as sales, or just what I have purchased for resale? I had planned to report all.
Hi @AnchorRoadVintage ! For Income Tax purposes, all items that were sold that were purchased for resale need to be reported. For personal items, if you sold these for more than the purchase price, you need to report the income; if you sold it for less than what you purchased if for, you do not report it since you cannot take the loss.
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@TheLastPixie wrote:When do you apply to pay taxes quarterly instead of just annually? If I am correct it is based on the amount of profit/loss?
thank you!
Hi @TheLastPixie ! There is no application process to paying estimated income taxes. You can choose to bump up your withholding (if you are employed elsewhere) or pay quarterly payments to Federal and State agencies. And yes, the estimated tax payments would be applied against your net income (profit less loss) for the year plus any other personal income you earned (wages, interest, etc.) TurboTax will walk you through step by step on how to calculate quarterly estimates.
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@KagesKrayons wrote:I just started using the Quickbooks/Turbo tax bundle in January. I noticed that when orders are imported, they include the sales tax that the seller paid (every state that is required to pay sales tax on an order), but I didn't actually receive that money and it isn't even reflected on the CSV file on Etsy. Last month I subtracted the "income" reflected on quickbooks and the income reflected on the Etsy CSV file and I made a lump sum "transaction" for sales tax in Quickbooks. Is this the best way to calculate our actual INCOME on Quickbooks? Come tax time, the transaction is going to show up on my schedule C as "Sales Tax", so is this going to cause issues? What is everyone else doing about this issue??
Hi there! When imported orders include income and sales tax charged to your customers (if sales tax is imposed on you as the seller), you would report the total as income on your Schedule C. Then you would subtract the sales tax paid as a deduction on your Schedule C.
WetxPaint
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@vintagedesignsource wrote:This has to do with sales tax. I am located in California, and see that you are applying the sales tax for this state to purchasers within the state. Are you also remitting the tax to the CDTFA? Up to this point, I have been backing the tax out and paying it for the CA customers to make sure I am compliant. My other site is wholesale only, so it is not at issue there. Thanks, and I look forward to hearing back in this forum. Nancy
Hi Nancy, I'm happy to help address your concerns!
1) To obtain your processing fee totals, you can download your monthly statement or your Etsy Payment Sales CSV files.
On the monthly statement CSV, the processing fees are called out in the "Fee" column on the line item of each sale.
On the Etsy Payments Sales CSV, the processing fees are called out in the "Fee" column.
2) As of October 1, 2019, Etsy collects and remits sales tax on orders sent to buyers with California shipping addresses. The tax Etsy collects is remitted to the CDTFA. As per the marketplace ruling in California, it is Etsy's responsibility to report the sales tax on eligible orders.
Before October 1, 2019, it is the responsibility of the seller to properly remit the tax to the state of California if required. If you collected California sales tax, you can download the Orders or Etsy Payment Sales CSV files that we offer. There is a "sales tax" column for any tax a US seller may have collect from US buyer based on their shop settings.
We provide more information in our help center on how to download these CSV files: https://help.etsy.com/hc/articles/360000343328
WetxPaint
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@MeisterMade wrote:I second this question. I setup Ohio sales tax, but see that Ohio is now one of the states that Etsy is automatically handling sales tax. Am I still responsible for submitting or is it handled already?
ALSO - can Etsy please have an export for sales that have sales tax that I'm responsible for, so I don't have to sift through my entire orders list?
Hi there! If the state passed a marketplace ruling, Etsy is required to collect and remit the sales tax in the state. You can view the full list of states in our help article: https://help.etsy.com/hc/articles/360000343968
The filing requirements differ by state, so we recommend that you contact the state's tax department to determine their specific requirements. However, sellers do not need to collect or remit sales tax to states for which Etsy is responsible.
If you collected sales tax prior to the state's marketplace ruling effective date, you can download your Orders CSV or Etsy Payments Sales CSV and review the "sales tax" column. This column would include the sales tax that you collected as a seller.
We are looking into ways to improve our finance reports, so we appreciate the feedback!
WetxPaint
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@KenPaulsTreasures wrote:How do I get a 1099? I haven't been sent anything, and I haven't been using QuickBooks, because I usually go to an accountant for my taxes.
Ken
Thanks for the 1099-K question, Ken!
The shop owner of FenderMinerals is correct that we only issue 1099-K forms to sellers that qualify. You can check out the help article they linked for more information.
For sellers that qualify, they can opt in and download the form electronically on your Taxpayer ID page under Shop Manager > Finances > Taxpayer ID. Note that the option to download is not available via the Sell on Etsy app yet.
Sellers who qualified and don't wish to opt in to receive the form electronically should receive physical forms over the next few weeks as we mailed them out at the end of January.
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@BenMcfuzzylugs wrote:A couple of questions (Im in the UK if it makes a difference)
The VAT and sales fees for listings is this the total price including Etsy automatically adds state tax to an order?
If doing simplified accounting is it OK to include only the amount of money Etsy sends to our account or the actual sales price and etsy expenses, or the actual sales price plus any state tax and the etsy expenses
Which amount for income is correct - the numbers from 'Payment account' or 'stats', 'sales' as the numbers do not add up
Thank you for your time
Thanks for the questions, @BenMcfuzzylugs ! Given that sellers' tax situations varies, we're not able to provide specific tax advice. We recommend that you check with a local professional on the best way to file your taxes for your business. However, I can clarify the different totals that you're seeing in your shop.
CappuccinoLace is correct that the revenue shown in your Shop Stats is your item costs. It does not include expenses, such as shipping costs. For example, if you have a sale and the item is $10 and the shipping is $2, you will only see the $10 reflected in your revenue shop stats total.
If you're looking for your gross total for the year, which includes expenses you later deduct on your tax filing, download your Etsy Payment Sales CSV and tally up the "gross" column. This CSV file also includes data on expenses, such as shipping costs and refunds, for your Etsy Payments sales. Per the order example above, this CSV column would reflect the gross order total of $12.
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@UptownGirlGalleryNonieDayVintage wrote:
This! I don't really understand the headings in the CSV and don't know what I need from it for tax purposes.
Hi @NonieDayVintage ! It's true that our CSV files contain a lot of data and that data may not be relevant to all sellers. Given the large amount of data in our CSV files, you may wish to contact our support team with more specific questions about the CSV data. Our support team would be happy to directly answer any questions for you have about the column titles or amounts you're seeing!
Feel free to contact Etsy Support here: https://help.etsy.com/hc/articles/115013375488
In regards to your question about which information is relevant for tax purposes, we recommend that you speak with a local tax professional. However, typical expenses that sellers can deduct include refunds, fees, and, which can all be found on our CSV files (not a full list).
I also appreciate you letting us know that the CSV file information can be confusing. We're investigating ways to simplify seller finances, and I also encourage you to share any additional feedback you may have with our support team.
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@BetsyGillDesigns wrote:I live in Michigan and collect sales tax... how do I remit the tax or does Etsy take care of it for me?
Thanks for your question @BetsyGillDesigns ! As of January 1, 2020, it is Etsy's responsibility to collect and remit sales tax on orders shipped to buyers in Michigan. You can view the list of states for which Etsy is responsible for sales tax collection in our help center: https://help.etsy.com/hc/articles/360000343968
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@SkysetterMobiles wrote:1099-k - I can't get the numbers to match up to my payments or stats. Please tell me exactly how the 1099-k is tabulated. What are the categories included in the figure besides sales?
I'm glad to help clarify about the 1099-K totals, @SkysetterMobiles !
On the 1099-K form we report your gross Etsy Payment sales as this is required by the IRS. Gross sales include shipping, refunds, card processing fees, tax (collected by you), and even canceled orders. Note that we do not include taxes collected and remitted by Etsy in your gross.
You can view your gross totals by going to your Taxpayer ID page under Shop Manager > Finances > Taxpayer ID and by downloading your Etsy Payments Sales CSV and tally up the "gross" column.
To download your Etsy Payments CSV files, go to Your Account > Shop Manager > Settings > Options > Download Data (https://www.etsy.com/your/shops/me/download). Select the type of CSV file from the dropdown under the Orders section. You can download the file either by month or year and save the file to your computer.
Additonally, in 2019, we issued one form to sellers even if they have multiple shops. If you have multiple shops with the same taxpayer information, you'll need to pull the gross totals from each shop.
Other totals you see in your shop, like the Revenue in your Shop Stats or the Sales & Credit total in your Payment account, will not match your 1099-K form as it's not considered the gross sales total.
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@NYYankeesStore wrote:I live in Florida and collect sales tax. Does Etsy remit the tax for me if my annual sales were $6,000 or less? Do I personally have to file income and remit the tax at the end of the year?
Hi @NYYankeesStore ! Etsy does not collect and remit sales tax in Florida, so it is the responsibilitiy of sellers to collect and remit sales tax in this state appropriately. We recommend that you speak with a local tax professional if you have further concerns about your tax collection and reporting obligations.
You can view the list of states for which Etsy is responsible for sales tax collection in our help center: https://help.etsy.com/hc/articles/360000343968
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@TheLastPixie wrote:How do I utilize The CSV report for taxes?
thank you!
Thanks for the post, @TheLastPixie. Please check out the answer provided to Sugarbutterflies about the CSV file types with a short summary of the information they contain. You can use the sales and expense data in these CSV files to determine your profit for tax purposes.
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@BackwaterDave wrote:What is Etsy's Marketplace Facilitator ID#?
Thanks for the question, @BackwaterDave. Sales tax collected by Etsy is reported to the appropriate state with Etsy's EIN 20-4898921.
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@KolbyRaeKreations wrote:Ok, I have a dumb question, I started my shop in 2019, so this is my first tax season, I did not sell 20000 or 200 sales, so I know I don't get a 1099 form. My question is do I add this as extra income? and if so I don't see anyway to add it ( I do my own taxes in HR block) without the form?
Thanks for the question! I see that Stacy provided this information to My1of1 already. Check out that answer as it applies to your concern as well!
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@PencilWashArt wrote:How do we get a record that Etsy paid our sales tax in our State (I am in Utah, and Etsy started collecting and remitting sales tax for Utah on October 1, 2019) - thanks.
Hi there @PencilWashArt ! Check out my response to PapyrusPatty as it applies here as well. Etsy is the responsibility party for sales tax collection in Utah as of October 1, 2019, so the state will contact Etsy if they have any concerns, not the individual seller. Note that sales off Etsy do fall under under Etsy's responsibility.
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@WestAndPineDesign wrote:Question in regards to Etsy collecting State Taxes. Per the Shop Manager > Finances > Payment Settings > Sales Tax Tab.
"The tax will be applied to buyers based on their shipping address and will be included in the final price paid."
Ohio is an Origin-Based Sales Tax State; not a Destination-Based Sales Tax State. Meaning the tax rate should be based on the Sellers address (My address); not the Buyer's address.
For example:
-My business is located in Hamilton County, OH. That tax rate is 0.07%
-I received an order and Etsy charged the buyer only 0.065%
-Am I now responsible for claiming the remaining 0.005% with the state of OH? How do I even do that??
Hi @WestAndPineDesign . The state of Ohio provides more information about marketplace facilitators at the follow linking - see specficially FAQ #12 about markerplace of sellers: https://www.tax.ohio.gov/sales_and_use/MarketplaceFacilitators/FAQ.aspx
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@FreshFloridaFruit wrote:I recently recieved my 1099K from Etsy. I sell about 10k a month. The total for the year if i add up month by month on ETSY is approx $118,000.
However, on my 1099k form i made $122,000 for a $4,000 difference. Why is the actual 1099k form adding about $4,000 difference that im going to have to pay taxes on? Please clarify the difference? Can i claim the lesser amount on my taxes verses the larger amount on the 1099k form from Etsy?
Thanks.
Thanks for the question! Check out the answer shared here. We also provide more information about gross 1099-K totals in our help center: https://help.etsy.com/hc/articles/360016389293
Although we report the gross, sellers can deduct eligible expenses on their tax returns to only pay tax on their profits. We recommend that you speak with a qualified local tax professional about your specific tax situation and filing.
Thanks for stopping by our Q&A!
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@AimVogue wrote:I am located in California and I have a question regarding the sales tax. I have a lot customer who is asking for a refund on the sales tax because they have a seller permit. By law, they are allow to purchase a wholesale without paying sales tax because they are going to resale the items. How can I refund the sales tax on etsy. A couple years ago, Etsy allow me to refund just the sales tax only. However, starting last year they eliminate that option for me to refunds the sales tax. Please advise on what should I do. Thanks
Thanks for asking about buyers with tax exemptions! Sellers do not have the option of directly refunding sales tax on an order. We are investigating how to improve the checkout experience for buyers that have eligible tax exemptions.
For the time being, please direct your buyers to contact Etsy Support for assistance with their tax exemptions. They can contact our support team via our help center: https://help.etsy.com/hc/articles/115013375488
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@HamrickAvenue wrote:I have a question about filing quarterly sales tax. I just saw that Etsy started collecting and remitting the sales tax for my state February 1, North Carolina. I don't understand how it is possible to accurately fill out the quarterly sales tax form for my state but not pay the amount that it shows I should owe. In NC, the form you fill out for quarterly sales tax is broken down into your sales in the state and outside of the state and that helps show how much you owe. There's not a way to indicate "I sold to NC but didn't collect sales tax because Etsy did it for me." I am very confused with how I am supposed to accurately include NC sales that happen here on Etsy and not look like I am underpaying what I owe.
Hello @HamrickAvenue! Thanks for submitting your question. Check out my response here, as this tax collection is Etsy's responsibility, and the state will raise any concerns with Etsy, not the individual seller. In regards to your question about how to file the sales tax with the state, this process varies by state. We recommend that you contact a local tax professional and/or the state government for clarification.
I hope this helps! Thanks!
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@MamisGemStudio wrote:I'm in WA. I purchased some supplies (materials to make my items) on Etsy in 2019 and paid sales tax that Etsy automatically corrected. As I have a reseller permit with my state and eligible for tax exempt on these particular purchases, I will have to apply for a refund with my state later. My question is: what is the best way to record these sales tax temporary paid on quickbooks? Do I record it as an expense to write off in 2019 and put it back as an income in 2020 when I get refunded? What is the tax line I should assign for these? Thank you.
Hello @MamisGemStudio! You are correct. You can assign these to a sales tax expense, or taxes & license when you pay the tax and you can assign Taxes & Licenses as the tax line. When you receive the refund, you can include the funds received in other income.
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@TheLastPixie wrote:Hello,
My question is on the cost of inventory.
Is the tax paid on cost of goods purchased for inventory included in that cost? Or is the tax not included in the cost? In other words is the cost of inventory the amount you pay for that item minus the taxes paid for that item?
For example hypothetically I pay $5 for an item and tax is say .50. Is the cost of inventory $5 or $5.5?
Does my question make sense?
thank you!
Hi there! If you have a reseller permit, the cost of the inventory would be $5 in this example, as long as the item is resold with your inventory (and not withdrawn for other business uses). If you do not have a reseller permit, you would include the sales tax paid for purchases for inventory in the total cost of the items you bought ($5.5 in this example).
I hope this helps!
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@SantaFeWool wrote:Why is the state sales tax collected and paid by Etsy showing as income to me when I never receive it? Is this something I now have to claim as income when it's a sales tax?
Taxes are not shown in the Etsy monthly CSV report at all, which makes balancing it a nightmare. (I have a background in bookkeeping and am a spreadsheet nerd.) Sales tax also shows as income in my integrated trial version Intuit Quickbooks account, so that doesn't match my books either. I was really hoping it would help resolve the Etsy CSV problem. Is there a fix for this?
(Note to Etsy: in reading this thread I just now discovered that Etsy has been paying my NM sales tax on my behalf since July of 2019 and didn't notify me, which means I have also been paying them monthly. Not cool. I probably would have figured that out on my own if your CSV files ever balanced, but I shouldn't have to.)
Hi there! If sales tax is imposed on the buyer, you would omit the sales tax from both income and expenses, unless you were allowed to retain any sale tax collected. In that case, you would include the amount you retained as income. If sales tax is imposed on you as a seller, include the sales tax with your income and deduct the sales tax paid as an expense when you file your taxes.
FidosFlowers
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Hi folks!
We'll be closing up this Q&A now. Thank you for sharing your questions, and for all the thoughtful feedback. If you still have questions, please feel free to reach out to our Support team.
Have a great weekend!
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Re: Q&A with tax experts at Intuit and Etsy staff
Today Feb 3rd. Jan 31st has already passed.
- Our partners at Intuit and Etsy staff will answer questions by 5pm ET on Friday, January 31.
FidosFlowers
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Re: Q&A with tax experts at Intuit and Etsy staff
Oops! Thanks for flagging, @DianesK9Creations. Updated to Friday, February 7. Happy Monday, everyone!
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Re: Q&A with tax experts at Intuit and Etsy staff
Hi
I am looking for a break down of:
product income/etsy sale fee/shipping credit/renew fee/shipping paid/refunds
That I can get from Etsy without going to buy Quick books
Lisa
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Re: Q&A with tax experts at Intuit and Etsy staff
hey you all ,where do I find my year end documents for my account? Thanks Dawn
WetxPaint
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@SugarbutterfliesHi
I am looking for a break down of:
product income/etsy sale fee/shipping credit/renew fee/shipping paid/refunds
That I can get from Etsy without going to buy Quick books
Lisa
Hi Lisa!
We offer the following CSV spreadsheets, which contain your sales and expense data, to help with bookkeeping and tax reporting:
Orders: This file will give you the sales completed in your shop, regardless of payment method. It's especially helpful if you accept payment methods other than Etsy Payments, for instance payments by mail or "Other." It also includes sales tax collected, shipping cost amounts charged to buyers, and Etsy Payments processing fees.
Etsy Payments: This file will contain all of the Etsy Payments sales completed in your shop, including orders that have been refunded and canceled.
Download your Orders and Etsy Payments CSV files by going to Your Account > Shop Manager > Settings > Options > Download Data (https://www.etsy.com/your/shops/me/download). Select the type of CSV file from the dropdown under the Orders section. You can download the file either by month or year and save the file to your computer.
Monthly Statement: Includes all Payment account activity for each month. This is best for looking at info like refunds, fees, deposits, etc.
Go to Your Account > Shop Manager > Finances > Payment account (https://www.etsy.com/your/account/payments). Scroll down and select the monthly statement you want to view. Choose "Generate CSV" on the right. You will receive an email when the CSV file is ready.
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Re: Q&A with tax experts at Intuit and Etsy staff
Following for information and the right date! Good catch @DianesK9Creations
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Re: Q&A with tax experts at Intuit and Etsy staff
Thanks I do real need help and I'm interested in a program to help me. Thanks.
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Re: Q&A with tax experts at Intuit and Etsy staff
Yes, tax law is always in flux and no one can know everything. I like to follow along in case I have missed something.
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Re: Q&A with tax experts at Intuit and Etsy staff
This has to do with sales tax. I am located in California, and see that you are applying the sales tax for this state to purchasers within the state. Are you also remitting the tax to the CDTFA? Up to this point, I have been backing the tax out and paying it for the CA customers to make sure I am compliant. My other site is wholesale only, so it is not at issue there. Thanks, and I look forward to hearing back in this forum. Nancy
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Re: Q&A with tax experts at Intuit and Etsy staff
@vintagedesignsource Etsy has been responsible for CA sales tax since 10/1/2019:
Since Etsy is responsible for collecting the tax since 10/1/2019, Etsy will also be responsible for remitting the tax.
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Re: Q&A with tax experts at Intuit and Etsy staff
I know that the credit card fees are included in our 1099-K so is there anyway to pull a report or to see how much we made in credit card fees? As this may end up being a write off.
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Re: Q&A with tax experts at Intuit and Etsy staff
I would also like to know if Etsy is paying the CA sales tax to the CDTFA. I have not yet received a letter from them asking me to pay the taxes so I am concerned about this. If Etsy is paying the CDTFA do we still have to pay them too?
I know that GRTTSGirlz said "Since Etsy is responsible for collecting the tax since 10/1/2019, Etsy will also be responsible for remitting the tax." I would just like a confirmation from an Etsy representative about this matter.
Thank you.
WetxPaint
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@vintagedesignsource wrote:This has to do with sales tax. I am located in California, and see that you are applying the sales tax for this state to purchasers within the state. Are you also remitting the tax to the CDTFA? Up to this point, I have been backing the tax out and paying it for the CA customers to make sure I am compliant. My other site is wholesale only, so it is not at issue there. Thanks, and I look forward to hearing back in this forum. Nancy
Hi Nancy, I'm happy to help address your concerns!
1) To obtain your processing fee totals, you can download your monthly statement or your Etsy Payment Sales CSV files.
On the monthly statement CSV, the processing fees are called out in the "Fee" column on the line item of each sale.
On the Etsy Payments Sales CSV, the processing fees are called out in the "Fee" column.
2) As of October 1, 2019, Etsy collects and remits sales tax on orders sent to buyers with California shipping addresses. The tax Etsy collects is remitted to the CDTFA. As per the marketplace ruling in California, it is Etsy's responsibility to report the sales tax on eligible orders.
Before October 1, 2019, it is the responsibility of the seller to properly remit the tax to the state of California if required. If you collected California sales tax, you can download the Orders or Etsy Payment Sales CSV files that we offer. There is a "sales tax" column for any tax a US seller may have collect from US buyer based on their shop settings.
We provide more information in our help center on how to download these CSV files: https://help.etsy.com/hc/articles/360000343328
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Re: Q&A with tax experts at Intuit and Etsy staff
I also have a question about sales tax. I'm confused on how to submit/ do the math when filing my quarterly sales tax since not every order has sales tax applied.
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Re: Q&A with tax experts at Intuit and Etsy staff
I second this question. I setup Ohio sales tax, but see that Ohio is now one of the states that Etsy is automatically handling sales tax. Am I still responsible for submitting or is it handled already?
ALSO - can Etsy please have an export for sales that have sales tax that I'm responsible for, so I don't have to sift through my entire orders list?
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Re: Q&A with tax experts at Intuit and Etsy staff
I want to add to this question, how do I prove to the State of Indiana on my tax return for sales tax that Etsy submitted that sales tax for me and that I do not owe it. I see they collected it in fees, but I have no proof to show to the State of Indiana that it was actually submitted so they could tell me that I owe it unless I show proof is this correct or am I wrong?
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Re: Q&A with tax experts at Intuit and Etsy staff
@MeisterMade I'm in Ohio also. I contacted the Ohio Dept of Taxation & they told me that we still need to tell them what our Etsy sales are. I was told when you file on the Ohio Business Gateway website, include all of your sales, including those facilitated by Etsy on Line 1, “Gross sales”, of the UST1. Then, on Line 2 “Exempt sales” include the sales that were facilitated by Etsy.
You would NOT collect or remit any sales tax to Ohio for Etsy, so the collected tax would just be $0 (unless you are selling off Etsy too). Etsy just started collecting Ohio sales tax on Sept 1, so you would still need to list any revenue & collected sales tax before Sept 1 if you didn't already file.
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Re: Q&A with tax experts at Intuit and Etsy staff
@CanningCrafts The info you shared is helpful. So, that means that I paid the state sales tax that I shouldn't have since Etsy handled it beyond Sept 1st. Oops. It wasn't a ton of money... Just not very clear from Etsy.
I definitely always list the sales from Etsy in the Ohio Business Gateway. I'll make a note from here forward to list those sales as exempt from here out. Thank you!
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Re: Q&A with tax experts at Intuit and Etsy staff
@MeisterMade Ohio's website wasn't very clear either :D I'm glad I contacted them because I was originally not going to list the sales at all. Perhaps Ohio will make it more clear how to file for marketplace sellers.
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Re: Q&A with tax experts at Intuit and Etsy staff
@CanningCrafts @MeisterMade - Unfortunately, that's still not correct.
Per the Shop Manager > Finances > Payment Settings > Sales Tax Tab. "The tax will be applied to buyers based on their shipping address and will be included in the final price paid."
Ohio is an Origin-Based Sales Tax State; not a Destination-Based Sales Tax State. Meaning the tax rate should be based on the Sellers address (My address); not the Buyer's address.
One of my Ohio based orders was only charged 0.065%. Ohio has me claim based on my address which is 0.07%. Now I have to call the State of Ohio to figure out how to claim only 0.005% of that sales... (This is very frustrating)
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Re: Q&A with tax experts at Intuit and Etsy staff
@WestAndPineDesign The csv file has errors... I also have a few Ohio sales where it shows Ohio sales tax collected (after Etsy started collecting in Sept). So I don't know what that means because if Etsy collected the tax, it is supposed to show 0 in the sales tax column.
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@DesignsBySherriAnn wrote:I want to add to this question, how do I prove to the State of Indiana on my tax return for sales tax that Etsy submitted that sales tax for me and that I do not owe it. I see they collected it in fees, but I have no proof to show to the State of Indiana that it was actually submitted so they could tell me that I owe it unless I show proof is this correct or am I wrong?
Hello! States require marketplace facilitators to provide periodic (usually monthly) reports to each of their marketplace sellers that includes the total sales made on their behalf and tax collected and remitted. Facilitators do not generally provide proof of filing and there is no place to include that on the seller's sales tax return. The monthly reports provided by Etsy can be used as proof to the states if sellers are questioned.
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@angelaanimates wrote:I also have a question about sales tax. I'm confused on how to submit/ do the math when filing my quarterly sales tax since not every order has sales tax applied.
Hi, @angelaanimates ! The amount of sales tax that is due is based on the dollar amount of taxable items you sold, regardless of whether sales tax was applied at the time of the sale.
WetxPaint
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@MeisterMade wrote:I second this question. I setup Ohio sales tax, but see that Ohio is now one of the states that Etsy is automatically handling sales tax. Am I still responsible for submitting or is it handled already?
ALSO - can Etsy please have an export for sales that have sales tax that I'm responsible for, so I don't have to sift through my entire orders list?
Hi there! If the state passed a marketplace ruling, Etsy is required to collect and remit the sales tax in the state. You can view the full list of states in our help article: https://help.etsy.com/hc/articles/360000343968
The filing requirements differ by state, so we recommend that you contact the state's tax department to determine their specific requirements. However, sellers do not need to collect or remit sales tax to states for which Etsy is responsible.
If you collected sales tax prior to the state's marketplace ruling effective date, you can download your Orders CSV or Etsy Payments Sales CSV and review the "sales tax" column. This column would include the sales tax that you collected as a seller.
We are looking into ways to improve our finance reports, so we appreciate the feedback!
