Do I have to file taxes on casual art sales?

[sduyer]

I have a full time job which is the main source of my income but I also do make some money throughout the year selling my artwork, paintings, pottery, etc. online and locally, but don't consider it self-employment and don't really have records of a lot of the sales. Do I file taxes for that income and, if so, how?

[GaryH · Accepted solution]

It sounds like you are treating your art sales as a hobby and not a business.  It is important to note that all income, unless specifically excluded by the Code, is taxable.  Your art sales are required to be reported as Other Income, which will appear on line 21, of page 1 of the Form 1040.   You will need to recap your sales records to report your art sales for 2013.   Going forward into this year, you should keep track of all sales made (date and amount).  As a hobby, you can deduct any hobby expenses as a miscellaneous deduction on Schedule A (to the extent of hobby income).   If you take the standard deduction and do not itemize, you still need to report the art sales as other income. 

If you have additional questions, make a comment here (do not start a new question) and we will continue to help you.

Thanks for using TurboTax!

[ddfoxx29]

Hi, I have a similar situation to sduyer:  I earn my income through being a health professional, but I started a photography business this past year.  Have registered the business with the state and have an EIN #.  I show my work a lot, have a lot of art expenses, but haven't made much profit.  Occasionally I'll sell something, but I don't support myself through artwork yet.  I'm planning to list 2 separate business: the photo business and the health professional business.  is this the right approach?  thanks, denise

[forrie]

I am in a similar circumstance as the original poster; except, I've not yet sold works.   How does this affect my personal tax rate?   At what point do you determine when your hobby becomes a business?   Is the dollar amount a factor?  For example, say I intend to sell prints of my works at some point, but still as a part of my hobby (ie: it's not my primary source of income).   How does that change my tax rate?    My biggest concern is having the gov't take too much of what I've worked so hard to create (aren't we all).   Say I sell about 10k of artwork as my hobby, how much of that will go to taxes?

[littlebuu]

I have a similar question.  I am an art student.  People are starting to ask me about selling my art, but I am not sure about how to go about it.  If I sell something and charge sales tax, where/when/how do I report that sales tax to pay back the government?  Is it when I file for income taxes each year or is there a separate process to report sales tax on items sold?  And if I am only selling a couple of items a year, do I need to declare myself as a business?

[Flyhigh13]

Same.

I just started running an online paint party business. My question is do i charge taxes? Also, if i make say $10,000 for the year how much would i pay in taxes?

[DianeW777]

Any income received for services or goods is taxable.  You have to decide if it's a hobby or a business for tax purposes. Review this page from IRS:

• Business or Hobby?

Key elements:

1. A hobby requires you to report the income you received and under the current tax law, Tax Cuts and Jobs Act (TCJA), no expenses are allowed to be used to reduce the money collected even if you itemize deductions.
2. A business allows you to deduct the costs necessary to obtain the income.  The law explains that 'you must be engaged in the activity to produce a profit'.  The test under IRS is that you must show a profit three out of every five consecutive year.
   • Deducting Business Expenses

The amount of tax depends on the decision. 

1. Hobby income will be taxed at your tax rate once all income on the tax return is combined and reduced by deductions and filing status.
2. Business net profits are the same with an added self-employment tax which is the equivalent of social security and medicare taxes paid as an employee. A self employed individual pays both the employer and employee portions towards their own social security account.
   • Marginal Tax Rates 2020
   • Self-employment Tax

[Edited: 02/11/2021 | 5:11 PST]

[lynnlou]

Sold a one-time art piece for a profit. Need to know if this is counted as capital gains or other income. Based on previous responses, it seems like it is other income. If so, can I deduct expenses from the piece, i.e., original cost, shipping expenses, brokerage company charges, etc?

[Fisher_EA]

Tax treatment of your sale will depend on the nature of the art - is it a collectible item? If so, the taxation will depend on how long you held this item - under one year (short-term capital gains) or more than one year (Capital gain on collectibles 28% plus 3.8% investment tax).  If it is not a collectible item, then the sale is reported as ordinary income. And in either scenario, you can deduct your basis in this item, such as the cost to purchase and selling expense.

[NA44]

What if I lived in Kansas and attended an art show in Missouri?

[MayaD]

Can you clarify your question? Are you asking how to report your Art sales in Missouri?

[NA44]

I work in Lenexa, Kansas, and last year I attended an art show in Kansas City, Missouri where I made sales and paid approximately $88 in sales tax. How should I report this in Turbo Tax?

[AbrahamT]

Report it as ordinary income or as capital gain as Fisher_EA explained earlier depending if it's a collectible item or not. You may have to file a nonresident return for the state of Missouri if your net income from the sales is 600 or more. See HERE under filing requirements and definition for nonresident. As far as the sales tax is concerned, you may take it on the federal side if you are itemizing deductions. See HERE as to how this gets reported in Turbotax.

Ordinary income;

Personal Income/ Less Common Income/ Misc Income/Other Income not already reported on a Form W-2 or a 1099

Capital Gain

Sales/Investment Income/ Stocks, Mutual Funds, Bonds/ Did you sell any investments -collectibles and go from there.

Good luck!