Etsy has become a popular platform for artists, crafters, vintage sellers, and small business owners to sell their products online. If you are an Etsy seller, you may be wondering when you need to file your taxes and when you can expect to receive your 1099 form.
According to the IRS, if you have made more than $600 in sales on Etsy, you will receive a 1099-K form. Beginning in January 2022, Etsy and other online marketplaces will be required to send out 1099-K forms to sellers who have made more than $600 in sales. It is important to note that the $600 threshold applies to the gross amount of sales, not the net amount after fees and expenses.
Etsy will send out the 1099-K forms to sellers by January 31st of each year. The form will be sent to the email address on file in your Etsy account, so it is important to make sure that your email address is up-to-date. If you do not receive your 1099-K form by February 15th, you should contact Etsy’s customer support for assistance.
Understanding Etsy and Taxes
How Etsy Handles Taxes
As an online marketplace, Etsy is legally required to comply with tax regulations. This means that they collect and remit sales tax on behalf of sellers in certain states. However, it is the responsibility of the individual seller to report and pay income taxes on their earnings from Etsy sales.
Etsy provides a variety of resources to help sellers understand their tax obligations. This includes a Tax Guide for US Sellers and a Tax Guide for International Sellers. These guides cover topics such as sales tax, income tax, and how to file taxes for your Etsy shop.
Role of 1099 in Etsy
Etsy sends out tax form 1099-K to sellers who meet certain criteria. According to Bonsai, Etsy and other third-party transaction networks like PayPal only typically send you a 1099-K form if sellers have over $20,000 or more in sales and at least 200 transactions. With a 1099-K form, an Etsy seller reports the total gross sales income they make on the platform throughout the year.
It is important to note that even if you do not receive a 1099-K form from Etsy, you are still required to report your earnings from Etsy sales on your tax return. Failure to accurately report your earnings could result in penalties or fines from the IRS.
In summary, understanding how Etsy handles taxes and the role of 1099 in Etsy is crucial for all sellers on the platform. By staying informed and compliant with tax regulations, sellers can avoid potential penalties and fines and focus on growing their business.
When Does Etsy Send 1099
If you are an Etsy seller, you may be wondering when you will receive your 1099 form. Here’s what you need to know.
Timeline for Receiving 1099
Etsy sends out 1099 forms to sellers who meet certain criteria. According to FreshBooks, if you made more than $600 in sales on Etsy in a calendar year, you will receive a 1099 form. Etsy typically sends out 1099 forms by January 31st of the following year. So, if you made more than $600 in sales in 2022, you should receive your 1099 form by January 31st, 2023.
Factors Affecting 1099 Delivery
There are several factors that can affect when you receive your 1099 form from Etsy. If you have not updated your mailing address or tax information on Etsy, your 1099 form may be delayed or sent to the wrong address. Make sure to keep your information up to date to avoid any issues.
Additionally, if you have not verified your identity with Etsy, your 1099 form may be delayed. To verify your identity, go to your Shop Manager and click on “Finances.” Then, click on “Payment settings” and follow the prompts to verify your identity.
In conclusion, if you made more than $600 in sales on Etsy in a calendar year, you should receive your 1099 form by January 31st of the following year. Keep your information up to date and verify your identity to avoid any delays in receiving your 1099 form.
What to Do If You Don’t Receive a 1099
If you don’t receive a 1099 from Etsy, don’t panic. There are a few things you can do to make sure you have the information you need come tax time.
Contacting Etsy Support
The first step is to contact Etsy support. They can help you determine if a 1099 was issued and if it was sent to the correct address. To contact Etsy support, log in to your Etsy account and click on the “Help” button at the bottom of the page. From there, you can search for “1099” or “taxes” to find relevant articles or contact support directly.
If you are unable to get a 1099 from Etsy, you can still report your income to the IRS. You can use your own records to report your income and expenses. Keep accurate records of your sales, fees, and expenses throughout the year so you can accurately report your income at tax time.
Another option is to use a tax professional or tax software to help you report your income. They can help you determine what information you need to report and how to report it.
Remember, it’s important to report all your income to the IRS, even if you don’t receive a 1099. Failing to report your income can result in penalties and fines.
In conclusion, if you are an Etsy seller, it is important to keep track of your sales and earnings throughout the year. If you make more than $600 in online sales, you will receive a 1099-K form from Etsy. This form is sent to both you and the IRS by January 31st of the following year.
It is important to note that if you do not receive a 1099-K form from Etsy, you still need to report your earnings on your tax return. You can do this by using your Etsy sales records and calculating your total earnings for the year.
Filing your taxes as an Etsy seller may seem daunting at first, but it is actually quite easy once you know what to do. By keeping accurate records and following the steps outlined by the IRS and Etsy, you can ensure that you are properly reporting your earnings and avoiding any penalties or fines.
Remember, if you have any questions or concerns about filing your taxes as an Etsy seller, you can always seek the advice of a tax professional or accountant. They can help you navigate the process and ensure that you are in compliance with all applicable tax laws.