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Trusted by 12,000+ self-employed pros

You Pour Heart Into Every Handmade Piece. Your Bookkeeping Should Reflect That Same Care.

The free bookkeeping tool that helps Etsy sellers and handmade creators organize ordinary and necessary business expenses for Schedule C.

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Deductions Most Etsy Sellers Miss

Every unclaimed deduction is money left on the table. These etsy seller expenses are pre-loaded in your template — you just fill in the amounts.

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Craft Supplies

Line 38 (COGS)

Fabric, beads, wood, resin, paint, yarn, raw materials.

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Etsy Fees

Line 10

Listing ($0.20), transaction (6.5%), payment processing, Etsy Plus.

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Shipping Materials

Line 22

Boxes, bubble mailers, tissue paper, tape, labels, postage.

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Packaging & Branding

Line 22

Custom packaging, stickers, thank you cards, branded tape.

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Product Photography

Line 8

Lightbox, camera, props, editing software.

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Etsy Ads

Line 8

Etsy Ads, Offsite Ads (15% fee), social media.

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Software

Line 18

Marmalead, eRank, Canva, Pirate Ship.

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Home Studio

Line 20b

Dedicated workspace, craft table, storage.

The Etsy Seller's Guide to Schedule C Deductions

If you earn self-employment income as a etsy seller, the IRS treats you as a sole proprietor (or single-member LLC) and you report that income on Schedule C (Form 1040), Profit or Loss From Business. Every ordinary and necessary business expense you track lowers your taxable net profit — which directly reduces both your income tax and your 15.3% self-employment tax. Most etsy sellers leave money on the table simply because they never recorded the expense in the first place.

Which Schedule C lines matter most for etsy sellers

Our free etsy seller template pre-loads the categories below and maps each one to the correct Schedule C line, so you never have to guess where an expense belongs:

  • Craft Supplies (Line 38 (COGS)): Fabric, beads, wood, resin, paint, yarn, raw materials.
  • Etsy Fees (Line 10): Listing ($0.20), transaction (6.5%), payment processing, Etsy Plus.
  • Shipping Materials (Line 22): Boxes, bubble mailers, tissue paper, tape, labels, postage.
  • Packaging & Branding (Line 22): Custom packaging, stickers, thank you cards, branded tape.
  • Product Photography (Line 8): Lightbox, camera, props, editing software.
  • Etsy Ads (Line 8): Etsy Ads, Offsite Ads (15% fee), social media.

How to fill out your Schedule C, step by step

Start by entering every deposit you received for etsy seller work as gross receipts (Line 1). Then categorize each business expense using the dropdown in the template's transaction tab — the Schedule C Summary tab totals each line automatically. The difference between your income and expenses is your net profit (Line 31), which flows to your Form 1040 and Schedule SE. Keeping these records current also makes it far easier to calculate quarterly estimated taxes and avoid underpayment penalties.

Record-keeping tips for etsy sellers

The IRS expects you to be able to substantiate every deduction. Keep digital copies of receipts, log business mileage contemporaneously, and keep business and personal spending in separate accounts wherever possible. A few minutes of bookkeeping each week is far less stressful than reconstructing a year of expenses in April.

This guide is educational and does not constitute tax advice. For preparation and IRS representation, our sponsor Arc & Ledger Accounting is a firm of IRS Enrolled Agents.

How It Works

1

Download

Pick your business type. Get a free template. No signup.

2

Categorize

Enter your bank transactions. Pick from the dropdown. ~30 min.

3

Review

Schedule C summary auto-calculates your income, expenses, and tax.

4

File

Hand it to your Enrolled Agent. Or let Arc & Ledger prepare your return from $300.

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Don't Have Excel? No Problem.

Download the file → Open Google Sheets → File → Import → Upload. Done. All formulas, dropdowns, and formatting transfer perfectly.

See full Google Sheets instructions →
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Download Your Free Etsy Seller Template

Every deduction pre-loaded. Works in Excel or Google Sheets. No signup. No email required.

📥 Download for Excel

For Google Sheets: download the file, then open Google Sheets → File → Import → Upload. Full instructions →

Need help filing?

Arc & Ledger's Enrolled Agents prepare Schedule C returns from $300 — and are authorized to represent you directly before the IRS.

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Most CPAs charge $500-800 for a Schedule C return. Arc & Ledger's Enrolled Agents do it from $300 — and they're authorized to represent you directly before the IRS if anything comes up.

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✓ Schedule C tax preparation from $300 (CPAs charge $500-800)
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Our free template works alongside any filing method — use it to organize your expenses first, then file however works best for you.

Common Questions

What Schedule C deductions can Etsy sellers claim?+
Self-employed Etsy sellers may deduct ordinary and necessary business expenses under IRC Section 162. Commonly claimed deductions include craft supplies (Line 38 COGS), Etsy fees (Line 10), shipping materials (Line 22), packaging and branding (Line 22), product photography (Line 8), Etsy ads (Line 8), and home studio costs (Line 20b). Your tax situation may vary, so consult a qualified tax professional for personalized guidance.
What is Schedule C?+
Schedule C (Form 1040) is the IRS form where sole proprietors and single-member LLCs report business income and expenses. It calculates your net profit or loss, which flows to your Form 1040. Etsy sellers use Schedule C to report product sales and deduct business expenses like materials, fees, and shipping. Our free template is an organizational tool that categorizes expenses by the correct Schedule C line numbers.
How much tax do self-employed Etsy sellers pay?+
Self-employed Etsy sellers generally pay both income tax and self-employment tax (15.3% for Social Security and Medicare) on net profit. Your income tax rate depends on your total taxable income and filing status. The self-employment tax applies to net earnings over $400. Many Etsy sellers may also have state sales tax obligations. Consult a qualified tax professional to understand your specific tax obligations.
Do I need to file quarterly estimated taxes as an Etsy seller?+
If you expect to owe $1,000 or more in federal tax for the year, the IRS generally requires quarterly estimated tax payments. Deadlines are typically April 15, June 15, September 15, and January 15. Etsy income often peaks around holidays, so tracking expenses year-round helps you estimate quarterly payments more accurately.
Are Etsy listing fees, transaction fees, and Offsite Ads deductible?+
Etsy listing fees, transaction fees, payment processing fees, and Offsite Ads commissions may be deductible as ordinary and necessary business expenses on Schedule C Line 10 (commissions and fees) or Line 8 (advertising). Keep records of all Etsy fee statements. Etsy Plus subscription costs may also be deductible. Consult a qualified tax professional for your specific situation.
Should I hire an Enrolled Agent or do my own taxes?+
An Enrolled Agent (EA) is a tax professional who has passed a rigorous IRS exam and is authorized to represent taxpayers directly before the IRS. Unlike other preparers, EAs must pass a rigorous exam and complete continuing education annually. For Etsy sellers with handmade inventory, platform fees, and home studio deductions, an EA can help ensure compliance and identify all eligible deductions. Arc & Ledger's team of Enrolled Agents specializes in Schedule C businesses.
Is the Schedule C template really free?+
Yes. Every template on ScheduleC.App is completely free to download, with no signup required. The site is sponsored by Arc & Ledger Accounting, a firm of IRS Enrolled Agents, which is why we can offer the templates at no cost.
Do I need accounting software to use the template?+
No. The template is a spreadsheet that opens in Microsoft Excel or imports directly into Google Sheets (File → Import → Upload). All formulas, dropdown categories, and the Schedule C summary work in both.
When is the Schedule C filing deadline?+
Schedule C is filed with your Form 1040, which is generally due April 15. If you expect to owe $1,000 or more, the IRS also requires quarterly estimated tax payments throughout the year, typically due in April, June, September, and January.
What records do I need to keep for my deductions?+
Keep documentation that substantiates each expense — receipts, invoices, bank and card statements, and a contemporaneous mileage log for vehicle use. The IRS expects you to be able to prove that each deduction was an ordinary and necessary business expense under IRC Section 162.
Can someone prepare my Schedule C for me?+
Yes. Our sponsor, Arc & Ledger Accounting, is a firm of IRS Enrolled Agents authorized to prepare returns and represent taxpayers before the IRS. You can send them your completed template and they handle the filing.

Every Day You Wait, You Risk Missing Deductions

Your free Etsy Seller template has every deduction pre-loaded. No signup. No email. Just download and go.

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