Yes, you need to report this income, if you are otherwise required to file a tax return. You are required to file a federal tax return if you are single and your gross income from all sources was at least $14,600 (For all filing statuses, see: Income amount that requires you to file). If Etsy was your sole source of income, you are not required to file a federal tax return. Self-employed individuals are required to file a federal tax return once their net earnings from self-employment income is $400 or more.
If you must file in New Jersey, it also depends on how much you made in total for the year. If you are required to file, you must also report the income from Etsy if you are a New Jersey resident. Single residents making $10,000 or more must file a New Jersey tax return, or couples making $20,000 or more, per Who Must File.
In order to report this income, if needed, you will file a Schedule C. There, you will list your income and expenses separately. Here is how to do this in TurboTax Online:
- Navigate to Federal > Wages & Income > Self-employment income and expenses > Start
- Answer "Yes" to the question "Did you have any self-employment income or expenses?"
- Give a description of the business
- Continue until the interview asks "how does your work fit into your big picture?", based on the information you provided, it's a side job and/or a business.
- Answer all the informational questions until you get to the screen "Let's enter the income for your work." Here, enter that you received common income- Other self-employed income, including cash and checks; then enter what you were paid.
- Once you've entered your income, type in your expenses in the proper categories, TurboTax Online will recommend popular categories, but refer to your records to ensure you are deducting all of your expenses
