Handmade Goods Consignment

user17725890385 · ‎March 03, 2026

Hello, I’ve been making some sculptures and some small jewelry to sell. I’ve been thinking about selling via consignment but I’m not sure if I would be taxed for it.

There’s 3 sculptures and 4 sets of jewelry. The place I plan on selling by consignment has a 50% fee and my price is going to be 120$ for each individual sculpture, and 20$ per jewelry set.

If everything were to be sold, it would total 420$ in net profit. However, because the consignment fee is 50%, the consignment shop and I get 210$ each.
I’m in Texas, and from what I’ve seen, you pay federal income tax if you’ve made a total more than 400$.

I’m a 20 y/o college student, this is the first time I’m ever doing something like this and I will not be doing it again for a long time. Additionally this is my only source of income.

My question is, do I have to pay income tax (or any other kind of tax)?

Opus 17

Broadly speaking, if you are engaged in a side hustle with a profit motive, and you engage in the activity regularly, it would be considered a self-employment business. If it is occasional, not for profit, not regular, then it is probably a hobby.

If it is a business, you must file a self-employment return if your net profit is $400 or more, even if you have no other income. You would pay self-employment tax, but you don't pay income tax unless your total taxable income is more than $15,000.

If it is a hobby, your profit is still taxable. You can't deduct expenses (like shipping, if you were doing this online) but you can subtract the cost of materials. If your materials are $50 and your proceeds are $210, you have $160 of taxable income. If this is your only income, you don't need to file a return. But if you file a tax return for any reason, you must include all your income even if some items are small. You would report this as miscellaneous other income.

See this,

https://www.irs.gov/newsroom/hobby-or-business-heres-what-to-know-about-that-side-hustle

View solution in original post

Opus 17

Broadly speaking, if you are engaged in a side hustle with a profit motive, and you engage in the activity regularly, it would be considered a self-employment business. If it is occasional, not for profit, not regular, then it is probably a hobby.

If it is a business, you must file a self-employment return if your net profit is $400 or more, even if you have no other income. You would pay self-employment tax, but you don't pay income tax unless your total taxable income is more than $15,000.

If it is a hobby, your profit is still taxable. You can't deduct expenses (like shipping, if you were doing this online) but you can subtract the cost of materials. If your materials are $50 and your proceeds are $210, you have $160 of taxable income. If this is your only income, you don't need to file a return. But if you file a tax return for any reason, you must include all your income even if some items are small. You would report this as miscellaneous other income.

See this,

https://www.irs.gov/newsroom/hobby-or-business-heres-what-to-know-about-that-side-hustle