Hi there, I needed some help! I want to start selling on etsy but I don't know how to go about it. I checked the website out already from the sellers point of view but I just want to make sure I do this right. I post my item and am aware of all the charges from etsy. Is everything from your personal accounts or do you have a different bank account? Also, what happens after? In regards to taxes and reporting, I mean. How do you keep track, how do you go about the process? So many questions!
ANY advice would help! Thank You!
etsy is really neat cause it kind of does everything for you. it will keep track of any sales you make. You'll have to open a paypal account for your etsy transactions to go through. Your paypal can be attached to your personal bank account, if you want. I don't charge sales tax in my etsy store...depending on where you live you may have to...or if you plan on filing taxes of any kind on your store. but for the most part, etsy is super step by step and user friendly. (:
I have a personal paypal already. Do I have to open one under business?
you can use your personal account, it's up to you to charge sales tax. I'd recommend using flat rate shipping boxes from the USPS (they're free) and will save you a lot of hassle of trying to figure out shipping costs. I wouldn't recommend accepting personal checks and money orders (another hassle). You might want to check out similar shops to yours and read their policies and up date your own. You will figure all those out as you go also.... but be aware that you should have some. Like all shipments will go out within 24 hours or international shoppers must contact me before purchasing an item.... or all of my shipments go out on such and such day.
look into etsy sellers email tips and tricks, they send them out frequently about getting found, taking better pictures (really important part of opening a shop). join an etsy team from your community, talk to them. get involved in their community and you will do better. also their FAQ section is very comprehensive.
Also as far as taxes go, you don't have to report or collect them necessarily...but you probably should. they don't require you to give them your social security number so they don't report it to the IRS Unless you make over $5000 in one calendar year. If you make less then, its up to you to decide
when you say "they" dont require you to give the social, who is they? If I dont make over 5,000 a year is it bad to not file or illegal or its just up to each persons discretion? If its over 5000, i have to for sure, right but I just save all the purchases I get?
they is etsy. it's a gray area, i think technically youre supposed to the same way youre supposed to if you sell anything on ebay... look at it that way
Yeah, I will check out other policies to help form mine. I read the whole sales tax article on etsy but Im still confused by all of it. I dont understand a lot of things but I think it has largley to do with the fact that I overanalyze everything.
Also, thank you for replying!
I am in California and have a seller's permit (resale number) so that I can buy supplies from wholesalers at discount prices without paying sales tax. I then have to report my sales and any sales tax owed to the State Board of Equalization (where I got the seller's permit) if I make sales. (If you never report sales to them, they will consider your business a hobby and will cancel your permit number, so it is a good idea to report sales to them to keep your seller's permit so you can keep buying your supplies). They send you notification when you have to file, and it is very easy to do. I live in California, so I have to charge California residents sales tax on their purchases. Those taxes collected are then passed along to the State Board of Equalization when it is time for me to file. Buyers from other states do not get charged sales tax, and I do not owe any money to the State Board for those sales. I DO still have to fill out my report with them, however, even if i do not have to send them any money. Again, it is easy to fill out their form, and they are available to help you do it if you need help.
Etsy sends you monthly statements to help you keep track of your fees and sales. Paypal does that as well. I set up a separate paypal account where my earnings from etsy will stay, and from there I can pay my fees to etsy and paypall and any taxes owed to the State Board. I have my other paypal account which I could use as well, but I chose to set up a new account to help me keep track of everything. On your own, you want to keep really good records of your sales and all the supplies you have bought and all your expenses.
Etsy has an option when you set up your shop that will automatically charge any sales taxes that you need to charge upon check out. I would check with your State Board what you need to charge, if anything. I only know what California's rules are. I wrote an email to the California State Board of Equalization asking if I need to charge sales tax when selling on etsy, and was told I DO need to charge sales tax to California residents because I am a resident, so that is what I do. My etsy shop policies alerts California residents that they will be charged sales tax.
I do not know what you are selling and if you have a seller's permit or not. You can write to your State Board of Equalization with questions to help you get started. I would keep really good records of everything you buy and sell. If you start making a lot of sales, you will have all the records you need to take to an accountant. I am just getting started myself, so I can't tell you what to do when you start making a lot of money.
Your etsy shop name can be anything, but if you want to sell outside of etsy as well, you will need to look into whether or not you need to file a Doing Business As (DBA) and whether or not you need a business license. I use my name in my business name, so I did not have to file a business name (fictitious business statement), and my county does not require me to have a business license for what I do. You can look everything up on the internet easily enough.
If you set up your shop to accept money orders, be sure to state that you will not ship until the money order has cleared (and that can take a while). You can go to your post office to ask about shipping as well as get good information from the postal service website as far as what you can ship to other countries and how to do it. When I ship to foreign countries, I buy outside insurance from shipsurance.com. It is cheap and gives me peace of mind. It is up to you if you want to ship with delivery confirmation or not. I ship small packages of jewelry, so I like to use delivery confirmation (and I get insurance from shipsurance if the price of the item is high).
You don't have to pay taxes if you make less than $600.00.