My craft sales finally covered costs last month, now tax forms confuse me

I've been selling my handmade items online since January. It felt awesome to see my revenue actually beat expenses for the first time. But I'm stuck on what tax forms I even need to fill out, any simple explanation?

3 comments

3 Comments

the_brooke1mo ago

How do you know when it stops being a hobby for taxes?

quinn_barnes61mo ago

Get what you mean about tax forms, they are confusing at first. noah_hill79 is spot on with the Schedule C and SE stuff. I remember my first year filing for my small business, I stared at those forms for hours. You list all your income and then take off your material costs, shipping, and other expenses. The self-employment tax part is where it gets real, since you pay both the employer and employee share. Just take it one line at a time and use the IRS guides, they help more than you'd think.

noah_hill791mo ago

Oh that's such a great feeling, hitting that break even point! I totally get the tax form panic though. For a simple setup, you'll likely need a Schedule C to list your business income and expenses, and then that number flows to your main 1040. The real kicker is the self-employment tax stuff, which is a separate form (Schedule SE). The IRS website actually has some pretty clear guides for small stuff like this (once you find them, it's a maze honestly).