Etsy Bookkeeping And Where To Find The Tax Info You Need

Share

It’s almost time to start getting income tax information ready again, and I’m sure that this year will be as confusing as ever for Etsy sellers. In this article I’ll show you where the information about income and fees are located on Etsy, and give a few suggestions about how to organize it.

Before I get started, here’s my disclaimer: I am not an accountant, and I’m not your accountant. This article isn’t legal or financial advice, it’s just to show you where to find the information so that you can take it to a professional or DIY your own taxes using software.

To file your Etsy taxes, you’ll need to gather the income and expense information that you’ve been tracking during the previous year. Double check that all of the figures were imported correctly into whatever system you use to organize them, then either use tax software or a professional accountant to fill out the forms correctly.

I use Turbotax software for people who are self-employed to file my taxes, and I use my own spreadsheets for annual bookkeeping. That doesn’t mean that I don’t go into Etsy to download the actual figures, though!


etsy bookkeeping and where to find the tax info you need

Some of the links in this article are affiliate links that will pay a small commission if they’re used to purchase something. To see the entire affiliate policy click here.


Download the csv forms from Etsy.

To download the csv forms that have all of the information about your Etsy transactions from the previous year:

  1. In your shop dashboard, go to settings–> options–> download data.
  2. Choose the csv file that you want to download.
  3. To download the information for the entire year, leave the month blank and choose the year.
  4. Click download CSV.
  5. Use these to verify the figures that you’ve entered in your bookkeeping program throughout the year.
Where to find csv files on Etsy for bookkeeping.

There are four types of csv files that you can download. These can be opened using Excel, or Google sheets.

  1. The Order Item form is a list of all items ordered throughout the year.
  2. The Order form is a list of each individual order with totals for payments and customer information.
  3. The Etsy payments sales form is a list of all of the sales that you made using Etsy payments, which is the required payment method in countries where it’s available.
  4. The Etsy Payments deposit form is a list of all of the deposits sent to your bank throughout the year.

So what should you be looking for on these forms? You might have to use all of them for one thing or another, but the main things to gather from them as follows.



The Order Item form

The Etsy Order Item form can be used to see which items sold the most, and to see a breakdown of payment processing fees per item.

This form also shows what coupons were used and the discount percentage that was applied, along with the discount amount.

This form is good to use if you track inventory, or if you want to see what items sold the most throughout the year. However, most of the financial info on it is very basic, so you’ll need the orders form to get the payment processing fees and a better look at the order values.

This form also has a list of VAT taxes received at the end of it if you’re not in the US, but if Etsy remitted them for you that column should be empty as far as I know. I don’t ship internationally so I’m not sure about this, so double-check for yourself!


Click to see the video.


The Orders Form

This is a form that your accountant will be interested in. It’s a list of all orders placed throughout the year, and includes income categories and expense categories.

Pay attention to Column X, which is the Order Total. That column includes the value of sales tax that Etsy collects and remits for sellers, but that isn’t included in the Order Net column AA. The sales tax amount isn’t detailed anywhere else, so when you’re looking at this form, Column X is going to be very confusing. Use the Direct Checkout Payments Form for the accurate income amount, not this form.

A lot of accountants are stumped by this, but because Etsy collects and remits the sales tax and sellers don’t handle that money at all, it throws those two values off. Just be aware of that when your accountant gets confused, or when you’re trying to figure out why your forms don’t reconcile. The sales tax might be to blame.

Income in the Orders Form

Order value (payments received)Column Q
Shipping (payment received from customer)Column V
Sales Tax (If collected and NOT sent in to the state by Etsy)Column W

Etsy doesn’t make a note of sales tax that is remitted directly by Etsy, since sellers never get that in or out of their accounts. That’s all handled by Etsy unless they don’t collect for a specific state. Sales tax that’s collected and remitted by Etsy is NOT counted as income.

Expenses in the Orders Form

Discounts (coupons, sales)Column T
Payment Processing Fee (Etsy payments) Also included in the finances section on your dashboard in the monthly statements.Column Z

Columns AB, AC and AD are for refunds and refunds for fees. Those should be subtracted from income and expenses, whichever they apply to.



The Etsy Payments Sales form

The Etsy Direct Payments Sales form shows the Etsy fees information, but it doesn’t have the payment processing fees on it. For that, you need the Orders form. This form DOES have the sale amount without the sales tax added in, though, so that would be your actual income.

Income and Expenses in the Direct Checkout Payments form

Gross amount= Item price + shipping price WITHOUT sales tax amountColumn E
Transaction and shipping fees (6.5% of total collected from the customer)Column F
Net amount (income minus fees)Column G

Columns H, I and J are the actual final numbers that are posted when the transaction is final. These are usually the same as the numbers in Columns E, F and G, unless there’s a refund involved.

If a refund was sent to the customer, the adjusted amounts will be shown in Columns K, L, and M, and the amount of the refund will be in Column Z.


The Etsy Deposits Form

This is a straightforward list of the amounts that were sent to your bank when your revenue was deposited. Make sure the amounts are the same as what’s recorded on your bank statements.v



Other expenses that aren’t on the csv forms.

There are also more expenses that aren’t included on the Etsy csv forms that you need to take into account, including marketing and shipping labels. Many of those are in the payment account information under the finances tab in the shop dashboard. You’ll need to download each month individually by clicking on “all monthly statements” at the bottom, then choosing the year and downloading each month one by one.

  • Etsy ads
  • Shipping labels
  • Fees for Etsy plus
  • Offsite ads fees
  • Listing fees (the 20 cents you pay to list an item)

The processing fees are now included in the fees listed on the monthly reports in the finances section.


What numbers you need for taxes.

To file your taxes on Etsy, you need the following figures:

Gross revenue (income including shipping collected)Direct Checkout Payments form
Etsy 6.5% transaction fees (expense) Direct Checkout Payments form
Refunds (expense)Direct Checkout Payments form
Payment processing fees (expense)Orders form or payment account fee reports
Etsy ads (expense)Payment Account/Marketing page
Etsy Plus fees (if you use Etsy Plus) (expense)Payment Account
Offsite Ads (expense)Payment Account/Stats page
Listing fees (expense)Payment Account
Shipping Labels (expense)Payment Account or credit card if you
don’t buy labels on Etsy
Sales tax collected if Etsy doesn’t remit for you (income)Orders form
Vat tax collected if Etsy doesn’t remit it for you (income)Order Item form

These are the basic Etsy figures you’ll need, but don’t forget the cost of your materials, overhead, mileage, etc. For a full workover of your bookkeeping and pricing, get my pricing guide here: Pricing GuideOpens in a new tab.


Keeping track of the numbers for Etsy bookkeeping

To find the figures for bookkeeping, you’ll need all four of the forms for different data points. It’s easiest to keep track of all of this information as the year progresses, but regardless of whether you do it manually or whether you use a bookkeeping program, you should verify everything by comparing the csv files to the information that you have.

I’m not sure why Etsy can’t put everything that we would need for taxes in one place, but the information is scattered around, and if you’re not careful you can miss something. The first year that I did taxes for my Etsy shop I almost missed deducting the payment processing fees becasue I didn’t know they were on a separate form!

You can also use the payment account information in the finances section of your shop dashboard as another way to check to see that data has been collected correctly. However, you’ll have to download every month individually by clicking “all monthly statements” at the bottom, then choosing the year and downloading each month one by one.

The csv files have the same information, so you don’t really need to do it both ways.

If you want to track everything manually, you can use forms that people make to do that. A lot of people like the forms from Paper and Spark on Etsy,Opens in a new tab. so you can check those out.

Etsy also has an integration with Quickbooks and some other bookkeeping programs, so if you like their formats you can use those: Etsy bookkeeping integrationsOpens in a new tab.



Free Etsy Bookkeeping Spreadsheet.

I developed this spreadsheet for myself, and it basically walks me through where each thing is located. It’s not straightforward, because the columns don’t line up with each other on different spreadsheets, so you can’t just copy and paste and have everything match up.

However, this is a little cheat sheet that can make sure you don’t miss anything.

The one thing to remember is that Etsy will withdraw their fees from your revenue before sending a payment to your bank UNLESS there isn’t enough in your payment account.

If that happens, you’ll also have a fee amount to take note of so that you can count it as an expense, but it will be charged to the credit card on your account.

Click here to get a copy of the spreadsheet:


What is the Etsy 1099 form?

The 1099 form is issued by Etsy as a reporting form for the IRS to state sellers’ gross income on an annual basis. Etsy and every other payment processor are required to submit 1099 forms for anyone who receives payments from them totaling specific thresholds.

The 1099 form breaks down your income by month, and it’s usually a frustrating experience to reconcile it because it tends to straddle dates. For example, it could say “June” but it might include some transactions from the very end of May or the very beginning of July.

The 1099 only reports your gross income, Opens in a new tab.and that doesn’t include discounts, shipping costs, Etsy fees, and any sales tax that Etsy collects and remits for you. It’s not the same as the payment amount that you’re going to receive in your bank account when they pay you.

What you need to understand about the 1099 is that it’s a reporting form that tells the IRS about every penny you received, but it doesn’t include expenses, and it’s not used to reconcile anything. You don’t need to make sure it adds up to the penny, as long as it’s pretty close. If it’s wildly off, you might want to get your accountant involved to figure it out.


Bookkeeping for Etsy is a massive pain in the butt, there’s no way around it. The forms confuse trained accountants and the information is scattered around in multiple places.

I highly recommend that you get some kind of bookkeeping software that helps you to sort all of this out and that keeps you from forgetting something!


Share

Kara Buntin

Kara Buntin has run a profitable home-based business since 1999, and has a background in art, theater design, and cake decorating. She's a top Etsy seller with over 51,000 sales on Etsy and her own website, and helps other home-based business owners with their business goals and SEO. She founded the Artisan Shopping Directory website to promote the artisans who are members of her EShop Success marketing program.

Leave a Reply

Recent Posts