Is there a dollar amount required before claiming income from selling handmade items on Amazon?

Jan 04, 2019

If I wanted to sell handmade items (nonclothing) on an Amazon artisan marketplace, do I need to reach a certain dollar amount in a year before I have to claim it as income? Also, if I need to charge sales tax, what do I need to do to get started?

The threshold before you are required to pay Self Employment taxes is $400 of income. Once your gross $400 or more, the filing of a Schedule C is required. You will be able to reduce the gross sales amount by allowable business expenses, so it is possible to get the amount below the threshold of self-employment tax.

As for the sales tax portion of your question, it depends on the state you reside in. If you are a Pennsylvania resident, you will need to file a PA-100 to register for a sales tax license. You will be required to collect sales and use tax for sales to Pennsylvania residents and remit them. You should check with your tax preparer to determine if there are other jurisdictions you will be required to collect and remit sales tax in.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Chad Schweighart, CPA, is an accounting manager with Gift & Associates in Mechanicsburg, Pa.

Pennsylvania CPA Journal

Read the latest from the Pennsylvania CPA Journal online or via the mobile app and digital edition.

Read More


Get the latest info on professional trends, management, and leadership skills on CPA Now.

Read More

Premier Sponsors

Platinum Sponsors

Gallagher Bollinger Logo

Silver Sponsors

Paychex logo
Capstan Logo
epsa USA

Bronze Sponsors

Fox School of Business, Temple University

Interested in becoming a sponsor? View packages >