Etsy Tax Calculator for 2026
If you sell on Etsy regularly to make a profit, it’s a business. You pay income tax and self-employment tax on your profit after fees, materials and other costs.
| Gross sales | |
| Etsy fees | |
| Cost of goods sold | |
| Mileage deduction | |
| Other expenses | |
| Net profit | |
| Self-employment taxSocial Security + Medicare, 15.3% of 92.35% of profit | |
| Federal income tax | |
| Total federal tax |
Tax tips for Etsy sellers
- Etsy fees (listing, transaction, payment processing, ads) are deductible. Download the yearly totals from your Etsy payments reports.
- Cost of goods sold covers materials and supplies that went into items you sold.
- Shipping labels you bought through Etsy are included in your fees; shipping supplies go in other expenses.
- Driving to the post office or to buy supplies counts as business mileage.
Which tax form you’ll get
Form 1099-K if your sales pass $20,000 and 200 transactions under the federal rule (some states use lower limits). Report your income either way.
Not sure what to do with it? Our quarterly tax calculator shows what to pay and when.
How this is calculated
Net profit = earnings − Etsy fees − cost of goods sold − mileage deduction − other expenses.
Self-employment tax is 15.3% of 92.35% of profit. Income tax uses the 2026 brackets after the standard deduction, half of your SE tax, the 20% QBI deduction.
If you also have a W-2 job, the result shows only the extra tax from your Etsy income.
Figures for tax year 2026. Full method and sources on our methodology page.
Common questions
Is my Etsy shop a hobby or a business?
The IRS looks at things like whether you run it like a business, keep records and are trying to make a profit. Hobby income is still taxable but you can’t deduct hobby expenses, so most regular sellers are better off treating it as a business.
Do I pay taxes on Etsy if I didn’t get a 1099-K?
Yes. The 1099-K is only a report. All profit is taxable, and self-employment tax applies once net profit reaches $400.
Does Etsy collect sales tax for me?
In most US states Etsy collects and sends sales tax for you as a marketplace facilitator. That is separate from the income tax this calculator estimates.
Last updated September 28, 2026. This calculator gives an estimate for federal taxes only and isn’t tax advice. State and local taxes aren’t included.