Depending on how you run your business, to make a profit or as a hobby, determines how to report your income and expenses.
If you sell on Etsy to make a profit, and you made $400 or more, you must file Schedule C. If you sell on Etsy as a hobby, you will report your earnings as Miscellaneous Income and deduct your expenses on Schedule A.
If you are operating as a hobby, and your income is low enough, you may not be required to file a tax return.
See this TurboTax article Selling on Etsy & Your Taxes for more information.
See this TurboTax FAQ to see if you need to file a tax return. Click "See entire answer" for the full page view.
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