2768703
If I sell my hobby crafts on Etsy, can I still consider it a hobby, or is it automatically considered business?
You'll need to sign in or create an account to connect with an expert.
Hi sev4titi, Thanks for your question.
Etsy is considered a Third Party Settlement Organization (TPSO), and will issue you a Form 1099-K if the aggregate sales amount is more than $600 for tax year 2022.
It is up to you to determine if this is a hobby (recreational pursuit) or a self employment (profit making endeavor.)
If hobby, you need to report income, but the cost can only be deducted if you itemize deductions (Schedule A).
If self employment, you can report self employment income and expenses on Schedule C, Profit or Loss from Business.
Below article explains further.
Hope the above helps.
The difference between a hobby and a business depends on your intent. Here is the 9 factor test the IRS uses.
https://www.irs.gov/newsroom/earning-side-income-is-it-a-hobby-or-a-business
Basically, if it is a regular and ongoing effort with a profit motive, it is a business, even if it is small.
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.
amcourtney25
New Member
ebnickiea76
Level 1
zeca-stevenson
New Member
Shawn B1
Returning Member
jessdutra23
New Member