Im in this exact situation right now. Just paid over $10k then found out I need to be paying quarterly, so I owe another $2k right away. So frustrating. We really get the shaft as small business owners. You would think the government would give us better tax breaks but nooooo, that's reserved for the billionaires.
You have literally answered almost every question I have spent weeks and weeks researching and agonizing over before opening my shop. I will be starting my Etsy shop tomorrow now that you have eased all my worries! Thank you so much!!!!!
Love this so much! Thank you, Cassiy! I have had my shop open for 18 days and already have 12 sales! Your videos have been a source of guidance and inspiration - SO THANKFUL!
Hey Jonathan, just wondering..it's been roughly 3 months since this comment... How is it going now? Are sales booming for you now or slowed down? Hardships, etc.
Oh my, taxes sound so discouraging, but it is, what it is. Many people forget about taxes and only look at the revenue of other creators who have businesses, and claim to make "6 figures" which indeed half of it is taken by IRS. And then get into some problems, or get into trouble. thank you for making a good explanation. ✨
Amazing explanation. Other people make it so complicated and you think there's something wrong with you until someone breaks down everything for you with an excellent natural languages! Thank you I just subscribed!
You have a new subscriber! Oh my gosh thank you so much for covering this bit of information, as most people don't! You definitely helped calm my nerves in the tax department. I'd also like to thank you for covering things in a calm step-by-step manner. It is seriously so much more helpful than I can describe!
I found you on here yesterday and I literally have watched over 10 videos already and I’m not disappointed thank you so much for all these great information there is no one out there like you! Thank you again🙏🏽
Wow you are literally the sweetest!! Glad to have you here on my channel and hope my videos bring you so much value. Thank you so much for the kind words
I was informed by Etsy today that the $20k and 200 order threshold has been delayed by the IRS until further notice and that the $600 and 200 sale limit is the rule for 2022 taxes!
This was very helpful - thank you! I was looking to see more of what it looks like to work with a print on demand business like Printful, Etsy's fees, how to pay taxes and how all that works together, but you ended up informing me of things I wasn't even looking for but are good to know! Thanks for giving me even a little more confidence to try this out since you didn't have experience with these types of taxes before. Taxes is one of the main things I'm intimidated by when it comes to the idea of opening my own shop - so thanks a bundle!
So glad this was helpful to you! You can never know everything before getting started. Just get started and figure out things in little baby steps as you go! You are always going to make mistakes and have to learn some lessons but trust me, you will NEVER regret just getting started and taking this leap of faith on yourself. You really can do this, you are capable, you are smart enough, you've got this! Promise
This is so helpful!!! Can you do a video dumbing it down even further 🤣 Like if you can use TurboTax and what forms would you need to fill out I’m a newer Etsy shop and have done over the $600 but I’m not quite where I want to be and feel like I just need to know more about writing off my costs and how to do so
Well, loved the video. And the non tax thing that struck me most was realizing that you started in 2020 that you said and that you had made 42k for that year. Your first year!? You must’ve known what you were doing. Congrats on that. Whenever I start up, I plan to take the tax percentage of profit each month and put it aside for taxes. That’s something I’ve always been told if I were to be required to fill a 1099.
Yes it's a great idea to save a percentage for taxes every month! I'd say 30% would be a really safe number just to make sure you have enough to cover it!
@@CassiyJohnson how would you separate your profits? Like splitting the profits for the business side and personal side Most CEOs put themselves on payroll. How would I be able to do that? If that's makes sense
I am brand new to Etsy and then I’m also starting to do some pop-up shops and this is very helpful but it’s very confusing. Thank you for sharing tips.
We’re being triple taxed on everything it’s insane. My main income isn’t Etsy. Im getting taxed on that income. I use that remaining money to go into an Etsy shop and am taxed again on that. It’s wild.
Well you only pay taxes on the total profits, so the money you put into your business is not taxed. You just get taxed on the total profits you make just like your regular income!
Thank you! I’m so excited to get started. My store was suspended on the first day, 😢so I’m working on making lots of designs to be ready when they open it. I just hope it’s as smooth as you explained. I’m glad you gave us the heads up on this, it’s definitely helping me panic a little less. I been waiting 5 days already and I’m trying to remind my self you said this would happen, it will get fixed I just need to wait. 😊
@@leahe2735 Actually I found out they do it to all new stores to be sure ur not a bot or something. I emailed them, got a auto response it can take 14 days for them to review the issue, but it was opened within 6 days. I made my first sale last Friday and my second on Saturday. I would say do lots of research and create at least 5 products then go for it! I’m so happy I finally did.
Hello Cassiy, fellow Michigander here! I'd say hold back at least 24% for taxes to make sure you have enough at the end of the year. Good info here, but like you, I'd recommend talking to your CPA/Tax Pro for more info.
I love your videos, thank you so much. My one request please is that you increase your video volume. You're very soft-spoken AND your videos (across your channel) are set at a much lower volume than RU-vid ads, so it feels like the house is going to collapse from how loud the ads are when they come on. It's jarring and I've not experienced this with similar channels. I can't even imagine if I was wearing earbuds. Your video sound is just too low. Otherwise, lovely and I wish you continued success.
Hello Cassiy, I enjoy very much your videos and subscription to your channel was obvious to me considering you seem like an honest and caring person. I am new to Etsy and this whole dropshipping businness. However, I do not live in US, I live in Europe and therefore, other rules apply for this concerning Taxes and such. I have found out that you do need to start an LLC or a businness first to put in your VAT-ID which is important due to the taxes and custom fees which the customers will have to deal with. Apparently, in the EU regulations you need to start a businness to receive your VAT-ID and put it in on Printify, so that when customers order something they will not have to pay double VAT, both when they order and when they receive the package which they actually do here. So, maybe you should inform this to people that are living outside of the US.
Hey if Etsy didn’t work out for you, no worries it isn’t for everybody. But I think pursuing a side hustle is a worth while cause. Since starting my POD and Etsy business in 2020 I’ve sold 700k, made about 210k profit. So in 33 months, if you average that out, I’ve made on average $6,300/month! That’s definitely not just a hobby. Yes it took time to build that business up and a lot of hard work but you can either work hard for yourself or you can work hard for someone else, but you likely are always going to be working hard at something. Best of luck to you in whatever you decide to pursue, but I hope that not succeeding at Etsy doesn’t discourage you from trying something else that might be better for you. There are so many great opportunities out there!
@@CassiyJohnson I am happy for your success, But Etsy isn't my job. It is my hobby, for what I do, (blacksmithing and forging) If I were to make 700K I wouldn't be able to move LOL. Here's my point many hobbyist pretty much break close to even; materials, tools, fuel, time, disposables. Here's my example, I made 11,000 last year on Etsy, all the money went into an account. After all was said and done, fees, shipping, sales tax, there was 4900 left in the account at the end of the year. Now the tax I will have to pay for that 11,000 will be right at 3400. Get my drift, many small hobbyist and businesses are just going to quit, just my opinion. I feel like I'm succeeding on Etsy and the IRS is making me fail. Thanks for the reply
Cassiy maybe you already have a video about this: could you, or do you have a video explaining paying printify? Do you pay them right when a customer places an order or when? And if I try to get a business credit card, what $$ amount of limit should I ask for? If I can’t get a credit card, then I’m forced to use my personal account, but if I get a lot of orders close together, will it drain my account to pay Printify? I’m just super confused on the whole money end (not the profits) but how the whole payment process works and what’s the best way to handle it. Thank you!
So the way that it works is 1. Someone orders on Etsy 2. The order gets sent to Printify and you pay for the item. Shirt cost plus shipping comes out of your Credit card of Debit card. I would get a business card with cash back with as high of a limit as they will allow but you can always pay it a few times per month if you need to. 3. Etsy pays you the amount the customer paid - Etsy fees. These payments in the beginning are once per week. If you just opened your shop you may also be "in reserves" where they keep part of the payment until the item ships. But after 90 days of your shop being open, you can change this to get paid daily instead. Hope this helps!
This was extremely helpful, thank you Cassiy! This definitely helped calm my nerves around taxes, what I should expect, and what to prepare in advance. Can you please explain to me why it benefits me to have an LLC? Again, thank you for such thorough videos and taking the time to answer all of questions via the comments, I can't tell you how much I appreciate this! I'm also from Michigan...Dearborn! Although I no longer live in the state. :)
Once a Michigander, always a Michigander lol I am so happy to help, seriously! The only real benefit of having an LLC is that if someone sues you, they are seeing your business and not you. Other than that it really all works pretty much the same. So good idea to get one eventually but its ok to get going without it!
@@CassiyJohnson That's right! Michigan is a great state! Ok, that's what I'd heard about LLC's in the past, but I wasn't sure if there was another benefit. I will consider doing that eventually. Thanks!
Hi Sam and thanks so much for the support! Starting an LLC, you are correct varies wildly state to state so I would recommend looking that up yourself to make sure it applies to where you live!
Yeah but again you must have had the money to be able to pay a CPA, what are we supposed to do when we don't have any money to put out for something like that? I mean I was lucky enough to have a dollar for the creative fabrica 30-day trial let alone paying a CPA to do everything.
Found your post interesting to watch. I can't wait to see your new videos soon. Good Luck with the upcoming update. This RU-vid channel is really very informative and effective.
Hi Cassiy, thanks for the great video. I was just wondering about the sales tax involved. Does Printify, or Etsy charge these? Did you need a sales tax exemption certificate? Any advice you can give would greatly be appreciated.
Hi Cassiy, thank you for all the amazing content that you are creating. I have a questions, that I hope you won't mind helping me out with. So for example, if I buy a shirt from printify for $10 + $4 shipping + etsy fees of say $1.40, so a total expenses are $16.40. Then if I go an sell the product for $20 on etsy, what happens with VAT? Do I need to then pay 20% VAT on the $20, which in this case would mean I am at a loss of $0.40 ($20 selling price - $4 VAT - $16.40 production cost). Basically, my question is can you please explain how does the VAT work?
Hello! So sorry but I don’t sell anything outside of the US so I have never had to deal with VAT before. I’d recommend trying to read up on it in the Etsy forums or see if anyone on YT has some videos about it. Sorry I can’t help more!
I'm confused by how this is inspirational... so you grossed 6 figures in revenue, but netted just 32k in profit?? Is it just me, or is this not extremely depressing?? You can easily make $32k a year working a rather low paying regular job. I'm just wondering how anyone thinks this makes any financial sense? I'm a creator, an artist, etc... I LOVE what I do, but I have to be realistic also. When Etsy increased their fee structure, all it did was kick the real handmade artists and crafters to the curb, it did NOTHING for the genuine handmade industry and small business artists. I just looked into Printify, and is was a horrible experience. Literally ZERO customer service, I was nearly in tears today I was so frustrated. Chat didn't work, no phone number to call, no contacts, waited for over 6 hours and then finally got help off one of their social media accounts. It was a nightmare. Don't get me wrong, I'm not trying to troll your video, or be a Debbie Downer, but I'm really curious how anyone can be excited to make 6 figures to only walk away with 32k. It just honestly makes no sense to me. Not a bad side hustle, if you are looking at that as all extra cash, but seems to be a pretty poor business model if you want to actually make a decent living. When I looked into how to make the most money with Printify, it's actually their affiliate program where you make money off subscription referrals. Diversifying income streams is great, but Etsy selling alone is not the answer for the grand majority of artists and crafters, at least not anymore.
Totally get where you are coming from! This was just my first 8 months that I sold 100k and kept the 32k but you are forgetting that it scales! In 2021 I sold 348k on Etsy made 91K after everything profit. So it's not just one time sales, you are building something that turns more evergreen overtime and keeps making you money year after year! Best of luck with whatever you decide to do though! Print on demand may not be the one for you but there are great opportunities everywhere!
@@CassiyJohnson thanks for your honesty, and for not deleting my comment lol. For Print on Demand, I don't doubt that it can scale, I just feel that the profit margin is less than desirable for the amount of work that you no doubt put into your business. It's still not a 6 figure income, even at 348k in gross sales. I guess I'm still pretty disgusted with Etsy's fee structure changes over the past several years. I have a unique niche market, and feel it would do quite well with POD, but Printify really disappointed me yesterday with their lack of customer service... ugh, so I was feeling a bit annoyed. I just feel, if you are going to have such a low profit margin, and need to make such volume sales to reach a decent income, you want this process to be super streamline and without hassle. Finding a POD that you can depend on, to me, would be an absolute necessity. I ordered samples through both Printify and Printful, so I'll be deciding between these two. I do like Printify's mockups and designer platform better, but just hate there is no phone number to call for service, and it took 6 hours and a trip their Facebook page to get any help. Again, thank you for your videos, and for your honesty :-) You're a sweetheart!
Hi Cassiy, I rewrote the question, it was deleted again. Strange algorithm, I know it wasn't you. It had no strange words, links or anything. Anyway. Have a good weekend.
I love your videos. I also listened to the life hacker family series and started my (mostly) digital shop. Can you please do a video on how to test and manage multiple listings for the same item? A lot of Etsy sellers recommend making at least 4 listings. But how long should you run a test? My shop is getting cluttered and I’m having a hard time keeping track of all the multiple listings and remembering what I’m testing lol….HELP!
So glad you got started! I track mine easily because I change the mock-up photo for each of the listings so they do not look the same. I just set the listings to manual renewal and then at the end of the 4 months, if they haven't sold, reevaluate if I need to adjust SEO or pictures etc. Or if I want to just let it stay expired. Sorry I don't have any perfect advice for you!
Great video! How smooth was the transition from sole proprietor to LLC? Did you get temporarily suspended by Etsy? I want to do this, but I am afraid of a temporary suspension.Thanks!
I started the business on Etsy doing a fun hobby. And I never thought it will be successfully. It's been my first year I generated 18k but I never kept receipts, and only will have a 1099 , what do I do?
Congrats!! What a fun problem to have... kind of! lol Most things should be pretty easy to go back and find to track your expenses. Go back through your Etsy purchases and add them up for the year, go back and add up from your bank account how many subscriptions you had for the year and the costs and anything else you have bought for your business. Here is a video where I go over my bookkeeping google doc that I sell for $20 that might make it easier to put it all into one place and then work through it with your accountant! ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-M_0xRgnhYro.htmlsi=pJt4ti0S0RLxGSTr
If you use printify and Etsy, do you need a reseller permit to charge sales tax from your state? Printify says on their website to upload this permit so they don’t charge you sales tax the items which confuses me cuz doesn’t the customer pay for all that when they purchase on your Etsy store and then printify starts printing ? This confuses me so much that it’s disheartening 😢
Maybe this is a dumb question but if you don’t know how much you’re gonna make that year because it’s your first year, how do you know what to pay in each quarter?
Not a dumb question at all! I’d recommend speaking to a CPA to get the best answer, I just waited until the end of my first year because I didn’t know and it wasn’t a huge deal. They said typically there is a small fee for doing that though. If you want to try to do it yourself, you first need to track all of your income and expenses as you go. Then you’d just need to calculate 25% of your total profits for the quarter and see if you’d owe more $1,000. If you do, then go ahead and make a payment of the 25% to the govt. and don’t forget to see what your state income taxes are as well if you have them!
There are never any dumb questions I believe. That is one of the first things I was always taught when I was younger. Especially when it comes to taxes, it almost seems sometimes like the government makes these things so difficult because they want us to screw up so that they can charge us extra fees. Lol
Great video and very informative! I may have missed this, but due to one of the last comments you made in the video, I assume this information was mostly based on having a proprietorship? I am just wondering as I'm considering an LLC.
All should still apply if you are an LLC, the only thing that will change I believe is if you ever incorporate, then you will pay slightly less self employment taxes. But I'd talk to a CPA to see what makes the most sense for you based on where you live!
Thank you Cassiy! I’ve read that there are no taxes in many states for selling digital products. I’m wondering if you have to pay taxes, state or federal, for the sales in your mock-up shop.
I have not filled my taxes yet but my understanding is that you don't have to pay SALES tax on most digital products but you still have to pay INCOME taxes each year on the profit that you make off of those digital products. If you have multiple Etsy shops like I do, all of your Etsy sales come combined on one 1099.
@@CassiyJohnson Cassiy you also mentioned that To create an LLC for your Etsy shop is a good idea. I have experience in real estate business and using LLC,s all the time for filling. Can I add my LLC later in my new Etsy shop just focus now adding products, or add LLC when I open the shop? How did you do it? Thank you for help in advance!
I'm finding conflicting information on State seller's permits. Does Etsy pay this to each state automatically for you now or do you still need to get a State seller's permit? Thanks so much
Etsy handles all of this for you as they are the ones licensed to collect the sales tax! No need for you to apply for all of the state sellers permits.
Thanks for a great video, Cassiy 😁 I was just wondering if Etsy collects and remits tax for all the states as I’ve read an article saying it doesn’t for a few states such as New Hampshire and Missouri? 🤷🏻♀️
Love the information, new subscriber here. So I have a quick question, always get confused. So the sales tax that a buyer pays from an etsy purchase ( says remitted to tax authorities) are the taxes for the state that buyer is from, correct? And etsy automatically pays them to that state, so you'll have to include your own state taxes in the price of the item( collect and remit to your state) or it'll come from your profit, then you'll end up paying double taxes. Am I correct? Thank you in advance.
So if you sell digital downloads and not physical products this doesn't apply? They said I wasn't getting a 1099 and I had 2800 sales for digital designs.
I want to make sure I understand your example correctly, after selling $134k you only made $42 profit and STILL had to pay $10k to the IRS? So basically your total take home was $32k?
Hey that's a good question, yes I only made about 32k profit for my first 8 months but that's what a lot of people make working a full time job in a year. I also was working full time and just doing this on the side for half of that time so I'd say it was definitely worth it. In 2021 I made 96K profit working from home, getting to go on vacations whenever I want. For September I took pretty much the whole month off because I was getting ready for my wedding and only worked 20 minutes per day! There is always a cost to do business, or if you have a job, the biggest cost is your time. I wouldn't go back to working a normal job for anything at this point.
Seems like the expenses are very high. The profit margin is a lot lower than I expected. Then the taxes, seem high as well. I'm no tax expert or sales expert, just seems the Profit and expense figures are very far apart. Maybe I'm not completely understanding, but it seems you need a lot of money to start up and keep running. I'm confused I think. Help please.
Thank you so much for all these helpful videos, you are absolutely amazing!!! The only question that I have as right now - If I don't have the resale certificate than Printify will collect the taxes from each purchase, is that right?
No you don’t need a resell certificate while selling on Etsy. As long as the order comes directly from Etsy to Printifys website, then you should pay not sales taxes!
That's really up to you, you can do one right in the beginning or you can wait years. The thing you really want one for is to protect your assets from your business assets.
@@CassiyJohnson Ohhh Okayy. That makes sense, Thank you very much! New subscriber here btw! :) I placed my first order of samples from Printful and Printify the other day! So as long as they turn out as I hope, I’ll be officially adding my first listings to my Etsy Shop! (Im so nervous! lol) 🤞🏻
I believe it just all depends on if Etsy is available in the country you are in, but I think that would work fine especially if you have us bank details. They just don’t like people to lie about where they live so just be honest
Hi Cassie, is it ok to start an Etsy shop as sole proprietor and just see if it's something I want to do, and maybe change it into an actual business later? I know you pay taxes either way. Just wondering if it's easy to switch over later or not.
Do you have to have a business bank account to start Etsy? I started buying supplies in January on my own personal account and didn't realize this as a question until now as I'm planning on opening up over the summer. I thought I could get one next tax season (after next year) and set it up and just go with that one in the future.
I have a question... when customers buy products they pay taxes on the purchase and then I need also to pay taxes on the profit? So customer and me we pay taxes 2 times on 1 item?
This is a great video, thanks! and also I know that Etsy doesb't collect the sales tax when someone buy the product from other country, how is that gonna process? Did someone had been deal with this problem?
Hello! Last year (2021) You had to sell less than 20k Revenue or less than 200 sales to not have to file. If you did not sell anything in 2021, then yes its my understanding that you won't have to file for 2021! In 2022, you have to sell less than $600.00 USD to not have to file taxes.
@@CassiyJohnson thank you so much for replying!!! Your always so helpful. I have been putting off doing my taxes because I was so confused and then I see your video, it is very timely and Informative!
@@CassiyJohnson if you did not receive a 1099 because you sold less than 20K, it does not mean you do not have to file. It means no 1099 was sent to the IRS. The 1099 informs the IRS that you sold that amount, that's all. It has nothing to do with filing. Everyone with a gross income over 12,550 must file.
Amazing video. I made 5 orders this month and I can see the net profit of all the orders at the payment page. However, I want to know the net profit of each of the 5 items. How do I do that? Is it mentioned somewhere so I don't have to calculate it manually? I even downloaded the CSV files but it doesn't show the net profit it shows the amount without the deductions.
Hi Are you explaining about sales tax Etsy collect for you or income tax? Do we need to file sales tax to the local area. I am in San Francisco Bay Area.
Do you need to set up a business LLC to have the ability to write things off? Can I still write things off if I'm just an individual and not a business?
I think you paid too much taxes but I am not a tax professional either. Something isn’t adding up. Your gross income was 42k not 134k. No one pays 10k on 42k.
Hi Cassidy. Could you tell me when filling tax on Etsy, you mentioned they will send Etsy seller form 1099, so we need to give them social number and personal information, is it safe to do that because I am afraid it will lead to identification crime since we don’t know if the person we submit our social number and personal information to is trustworthy or not.?
Ok just some clarification to ensure I understood: If I use etsy or even facebook market place as a platform in the year 2023 and make over the amount to where a 1099 is sent to me, when I get my 1099 at the beginning of the next year for the 2023 year to file taxes and I see I met the $1,000.00 or surpassed it only then will I be required to make payments during 2024 for that tax season?
You would be a taxpayer if you started this business and would pay taxes on the income just like anyone else. You would just use your SSN when signing up and could open an LLC if you wanted to in the future.
How do we find a tax professional in our area? I’m scared of scams, people who will have my personal information, not knowing if they’re legit? But I’m going to need help and I don’t know where to find it.
