It’s tax season! Everyone’s favorite time of the year! Well, we can pretend anyway, but the good news is we have some tax tips for your Etsy shop! So stick around and make sure you’re saving as much money as you can on your taxes and finding even more Etsy shop success!
Everyone’s favorite topic
Today, we’re chatting about everybody’s favorite topic: tax preparation (ha!). Which, we’ve all been waiting so long to talk about, right?! The big holiday rush is over. You got through all those pesky holidays that distracted you from important things like taxes. Now, you’re cruising in the new year and you’ve realized last year isn’t totally over yet. Why?? Because tax time is coming up! Ew. Of course, you want to pay what you owe, but not a penny more. And thinking through some tax tips for your Etsy shop is just what you need as we navigate tax season😬
Getting it all together
This is the time of year that you’re really going to need to jump in and get organized. Whether you’re using a CPA or using TurboTax, there’s a whole lot of organization you’ve got to put together. In light of all this, we’ve got some tax tips for Etsy that will help you plan for and possibly use as deductions to maximize the savings for you on your taxes.
Don’t you worry ‘bout a thing!
The purpose of all this is to help jog your memory on some commonly missed deductible expenses! Now, of course, all of these won’t apply to your situation. And just to be super clear, we’re not CPAs or lawyers, so this isn’t written in stone, tax-free legal advice for you and your situation! What we DO want to provide are some ideas that you CAN discuss with your lawyer and or a tax advisor. So let’s jump right in, because who doesn’t love possible ways to save some dollars? And as they say, every penny counts!
1. Subscriptions
The first thing you’ll want to think about are the kinds of subscriptions that you’re using for your business. Marmalead, for example, would be a tax write-off for your business (hello, we LOVE that!) and any other kind of services that you’re subscribed to. Whether it’s file sharing, email services, or anything similar you’re using for your shop. Below we’re listing these out for you to hopefully make it super clear:
File Sharing: Drop Box | Google Drive | We Transfer etc.
Email Services: Mailchimp | Flodesk | Convertkit | Mailerlite etc.
Webhosting: Bluehost | Godaddy | Squarespace | Wordpress | Wix | Showit etc.
Software: Adobe Creative Cloud | Canva etc.
CRMs: Honeybook | Dubsado etc.
Other subscriptions might include cloud storage, antivirus on your computer or a password manager like LastPass. Basically, anything on your business computer that you’re utilizing for your business is fair game to write off.
2. Your phone
You may not be taking all that many calls for you at the shop, but hey, maybe you are. Maybe you’re talking to suppliers. Either way, we expect you’re using it to conduct a lot of business, whether that’s answering Etsy messages or checking on orders. Also, any social media activity like Facebook and Instagram are all done through your phone, which are definitely business activities.
3. Education
The third thing to keep in mind is any kind of educational expenses that you run into. This doesn’t have to be traditional expenses either. These could be courses that you’ve bought online. Any kind of work that you’re doing to further your own education to build up your shop absolutely counts. Also, if you go to any conferences or do any travel that’s business-related, this can also be counted as expenses for your business. Track all of that and write it off!
4. Equipment
What might this include? Things like, cameras, memory cards printers, a new computer, a tablet, basically any “equipment” that you’re going to use in your business. That’s all deductible as well. Also, be sure you don’t forget your office supplies! We’re talking even pens and paper for your printer. There are all kinds of things that you have under that office supplies category.
5. Mileage on your vehicle
If you’re driving back and forth to the post office to mail things for your shop, keep track of those miles. There are apps you can use that will help you do that, like MileIQ. This is super easy to use! Just run it on your phone and it’ll prompt you by asking what the purpose of the miles you drove just were. You can then track those miles under personal, charity, business expense, etc. Right there on your phone you can now keep track of where you’re going and deduct any kind of mileage that you have on your vehicle.
6. Home office deduction
This is something that most business owners know something about, yet the Internet is so full of information scaring them off that they don’t use it. For whatever reason, the Internet likes to say that if you don’t do this, or even if you do it properly, the IRS is going to show up with their notepad and do some sort of inspection of your house and make sure there’s not a single personal item in your business space. Far as my CPA tells me that’s not true. This is a perfect example of something to speak with your CPA about. You shouldn’t be scared to take legal deductions.
Talk it through
So, see what your CPA has to say about it! This is also a great time to remind you to not be afraid to talk to your CPA about these different things. Come to them with ideas. Let them know that you read about something you might be able to use as a deduction and ask them what they think. Let them be that advisor for you. If you’re holding inventory at your house or you have a workspace somewhere at your home, your technical home office area could be a substantial part of your home.
Don’t ignore it
We’ve talked to sellers before who have taken over almost entire sections of their home with their inventory and packaging/creating space. Some sellers have even moved to larger houses because they need more space! This is something you don’t want to ignore. If you’re using a significant portion of your house for work purposes, this is absolutely something to look into.
7. PO boxes
You might use a PO Box as your business address instead of your home address. If you are doing this, it’s definitely a business expense as well as the mileage to go to the Post office to go check on that PO Box.
Final thoughts
There you guys go! There are seven extra things to be thinking about during this fun and exciting tax season that everybody loves so much (again…ha!). Hopefully, these tax tips for Etsy have helped at least jog your memory about things that you might have included on your taxes last year. Or maybe there are things you hadn’t considered or thought of before. Be sure to talk to your CPA!
If you’re using TurboTax, check and see if there’s a spot to fill these kinds of things in. It does a pretty good job of prompting you for some of these business expenses, but really good things to keep in mind. We truly hope everything goes well for you this tax season!
Happy selling and tax filing, everyone!
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