The Step by Step Guide to Filing Your Taxes for E-commerce Business Owners

Check out this step by step guide to filing your taxes for e-commerce business owners. If you're an Etsy shop owner, Shopify seller, or online business owner, this explanation of the Schedule C will help you understand how to do your taxes this April.

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⬇️ Get your bookkeeping templates from Paper + Spark:

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⬇️ Additional Resources mentioned in this video:

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⬇️ Let’s connect:

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👋 Hi! I'm Janet LeBlanc

I’m a Louisiana girl now living in South Carolina, a Certified Public Accountant, a serial-entrepreneur, and a mom of two. My passion is helping other creative women bring their entrepreneurial dreams to life with confidence. As an accountant and data nerd, I love creating tools + resources to help you achieve financial success in your biz and personal life.

Why should you listen to anything I have to say? Because I’ve been in your shoes! I started a handcrafted jewelry shop on Etsy back in 2011 as a side hustle from my accounting job. During my time in the handmade community, I heard a lot of the same frustrations and questions over and over. Concerns like, when am I supposed to register my shop? Do I have to charge sales tax to my customers? When do I claim this on my tax return? What sort of bookkeeping system am I supposed to use?!

In 2014, I finally united my love of handmade and accounting and founded Paper + Spark. In 2015, the first iteration of the Etsy Seller Spreadsheet debuted. This product completely changed the course of my entrepreneurial journey. Creating spreadsheets isn’t the sexiest or most glamorous product to design (although I like to think they’re pretty, for spreadsheets), but getting the chance to help creatives feel more confident about their money has been SO fulfilling and I am grateful to serve you today!

🌐 Visit Paper +: Spark to learn more:

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#ecommercebusiness #creativebusinessowner #handmadebusiness #taxes #businesstaxes

[JR-szcx]

The video was awesome and explains so much, thankyou !

[JR-szcx]

You think you can do a video on states and digital goods taxes, like ebooks or subscriptions, it's very confusing after the supreme Court ruling south Dakota vs Wayfair? It will help a lot of us who are extremely confused .

[JR-szcx]

You think you can also do a video on the states nexus it's extremely confusing, 100, 000 and 200 transactions

[danielleweaver]

You are the BEST!!! been using your spreadsheets since 2021 and they are a live saver!!! I will say the COG section confuses me and stresses me out e very tax season 🤦‍♀️ cant get my brain wrapped around it haha but i try my best.

[JeromeSCook]

Thank you for the content! I have two questions 1.) Do we also fill out for SE for self employment tax and 2.) when we pay ourselves how do we file that income for income taxes

[carlielavin]

I love your content and the Etsy seller spreadsheet is going to be a life saver for me! Would you consider doing a video on filing a 1065 as a partnership?

[Marshy_]

i have looked literally everywhere for a video like this. thank you for breaking it down like that. i know this video is older but i hope you can respond! i have QUESTIONS!!! Do we need a tax app like tax jar using shopify? all these videos make everything seem so scary but yours doesnt. how do i pay them the taxes that ive collected on shopify? with this form??

[zeldramcneal]

Thank you for this! You made it easy!❤

[selfmadeshortstories]

Hello Thank you so much for sharing this much needed information!!!! I was wondering when filing jointly will our info on 1040 all be in the same form? Or will he have a 1040 and I have a separate 1040.

[JR-szcx]

Can you also include in the videos the answer to the following question, if for example your business is in the state of Michigan and other states start buying from your online store which is located in the state of Michigan, when or if you have to pay taxes to other states because buyers are buying on your online store from other states ! Or when does nexus also come into play from outside of state purchases ! These questions will really help me and others like me who are really confused and frustrated and just ready to give up on e-commerce! I spoke to a company and they want to charge me $400 dollars for sales tax license per state per location, imagine how many counties are in the USA! Your my only hope, my last hope .

[selfmadeshortstories]

Also another question 😂 as a sole proprietor do I need to register my online retail business with the state or the IRS?

[atr]

do you have a new Shopify spreedsheet for 2023?

[karlamurphy]

2 quick questions: 1. As an Etsy seller, do I need a Power of Attorney and Declaration Of Representative (Form Gen-58)? I'm an LLC so I have a Registered Agent. 2. Do we need a Resale Cert of Exemption (E-595E) if our State Dept of Rev said we didn't need to file for a tax ID because we sell exclusively on a marketplace? Thanks! I'm so confused with all I've read online at this point.

[cassiebquerica]

Do you have a video on state sales tax? You are awesome and explain everything!

[amandad]

Thank you this is so helpful! I have a question about Purchases, and Materials and Supplies of section 3. I might be overthinking it. So I sell bookmarks + stickers that are made at a print shop and manufacturer. But I design them. So would the cost of what I paid to get those made be in Purchases? My manufacturers buy the ink and paper, not me. I just use an iPad and Apple Pencil to draw everything, which would go under expenses or materials and supplies? Thanks you!

[joannagv]

Do I have to register ‘sole proprietor’ business somewhere before starting an e-commerce business? How does it work if you sell digital products only?

[JKelvinFallah]

Quick question: I am a dropshipper and do have physical inventory. do i have to mention inventory at the beginning of the year?

[yohannasudjono]

Hi Janet, I already register for sales tax in my California state last year, but I just start sell on Etsy this year, no sales from last year, should I fill sec C form 1040 for submit this year tax?

[jenniferjade]

This is federal right but, what about state taxes. If I just sell digital products online do I just pay taxes on profit federal only or do I have to send in a state tax for each state minus states that don't have state taxes?

[originalkingdomhearts]

Question, Do these steps still apply if this is the only income I am making? I plan to run my etsy full time for now while I job hunt. I just fill out the Schedule C and give it to the irs?
Also how do we know if we have to file quarterly vs annually.