The Best Way to Prepare for Etsy Taxes as a Small Seller
Tax season can sneak up fast — especially when you’re busy running your Etsy shop, managing orders, and creating products.
If you’re like most small Etsy sellers, you probably:
Aren’t sure what expenses you can deduct
Don’t have all your records in one place
Feel overwhelmed by the idea of doing it all yourself
The good news? Preparing for taxes as an Etsy seller doesn’t have to be complicated — as long as you know what to track and have the right tools.
What You Need for Etsy Tax Prep
To confidently file your taxes (or hand things off to your CPA), you’ll need:
A total of your income for the year
A breakdown of all Etsy fees
A list of business expenses
Proof of purchases or receipts
Your estimated profit (a.k.a. what's left after all those fees and expenses)
Bonus: If you made more than $600 on Etsy, you’ll likely get a 1099-K form, but you still need to report all your income — even if you don’t get one.
Common Tax-Deductible Etsy Expenses
Here are just a few things you may be able to deduct as business expenses:
Cost of materials/supplies
Packaging & shipping supplies
Etsy listing & transaction fees
Software tools (Canva, email marketing, etc.)
Office supplies
Home office space (if you qualify)
Always talk to a tax pro if you’re unsure what qualifies!
Use a System to Stay Organized All Year
Tracking everything manually (or saving it all for tax season) = stress and missed deductions.
That’s why I use my Etsy Seller Bookkeeping Bundle — a simple spreadsheet that tracks:
Income
Etsy fees
Expenses
Estimated taxes
Year-end profit report
👉 Get the Etsy Seller Bookkeeping Bundle here — it’s beginner-friendly and comes with a step-by-step tutorial.
Estimate Your Taxes with Confidence
Not sure how much you should be setting aside? That’s where the Etsy Profit Calculator comes in. It helps you:
Calculate your real profit per product
Understand your margins
Know how much to save for taxes on each sale
👉 Download the Etsy Profit Calculator for just $5
Grab the Free Checklist for Ongoing Tracking
Need help staying on top of your bookkeeping month to month?
📋 I created a free Small Business Bookkeeping Checklist to help you track everything on a daily, weekly, monthly, and annual basis.
👉 Download the free checklist here
Start Now, Stress Less
Tax time is a lot less scary when you stay organized. With the right spreadsheet, a checklist, and a little monthly maintenance, you can save money, avoid panic, and feel confident going into tax season.