Do you have a passion for crafting? If you're selling your handmade items at craft fairs, festivals, online, or even at home, you may be wondering if you need to file taxes. The answer is yes! According to the Internal Revenue Service (IRS), if you earn income from selling crafts, you must report it on your tax return. In addition, most states require you to collect and remit sales tax on these sales. Even if you don't collect sales tax from your customers, you could still be responsible for paying the tax owed to the state.
Each state has different sales tax laws, so it's important to contact your state's sales tax division for specific laws in your area. Handmade items such as pottery, jewelry, knitted or crocheted items, and more are considered tangible personal property (TPP). TPP is something that can be felt or touched, which means that it has a physical presence. If you're selling crafts as a hobby or side business, it's important to understand the tax implications of your activities.
Filing taxes for selling crafts can be complicated, so it's best to consult with a tax professional who can help you navigate the process.
