This is general information, not legal or tax advice. Permit and tax rules change, and your situation may differ. Always confirm current requirements with the official state agency linked in this guide, and consult a licensed attorney or tax professional for advice about your specific business.Last verified against official state sources: June 2026
If you sell crafts to make a profit, you run a business in the eyes of the IRS. You report income and expenses on Schedule C, and you can deduct the ordinary, necessary costs of selling: supplies and materials, booth and table fees, mileage, shipping, fees, and often a home studio. You owe self-employment tax on your net profit, and you must report all income even if no 1099 arrives. Keep receipts and a mileage log, and ideally a separate bank account.
The first question the IRS asks is whether you sell crafts to make a profit or as a hobby. A business files Schedule C and can deduct its expenses against its income. A hobby generally must report the income but cannot deduct expenses to offset it. The IRS weighs whether you keep businesslike records, put real time and effort in, depend on the income, and have a history of profit. If you show up to sell, track your numbers, and aim to make money, you are almost certainly a business.
These are the expenses craft sellers most often write off. To be deductible, an expense has to be ordinary (common in your trade) and necessary (helpful and appropriate for the business).
On top of income tax, self-employed sellers owe self-employment tax of 15.3% (Social Security and Medicare) on net profit, reported on Schedule SE. You do get to deduct half of it. If your net earnings are $400 or more, you generally must file. And if you expect to owe about $1,000 or more for the year, the IRS expects quarterly estimated tax payments rather than one lump sum in April.
This is exactly why tracking profit per show matters. Our booth ROI calculator and the vendor dashboard let you log booth costs and sales as you go, so the deductible expenses above are already itemized at tax time.
A common mix-up: the sales tax you collect from customers is not your income and is not a deduction. You are holding it for the state and sending it back. That is a separate obligation from income tax, and it has its own registration and filing rules. For seller's permits and sales tax by state, see our state vendor permit guides.
You must report all business income, whether you are paid in cash, by check, or through an app, and whether or not you receive a Form 1099-K or 1099-NEC. Payment apps and marketplaces send 1099-K forms once you cross a reporting threshold, but that threshold has been changing year to year, so check current IRS guidance. Either way, the income is reportable, so keep a record of every sale.
The vendors who dread taxes least are the ones who keep simple records all year: a separate bank account or card for the business, receipts for supplies and fees, a mileage log, and a running tally of sales per show. Do that, and your Schedule C nearly fills itself in.
Find your state's seller's permit and sales tax rules, line up upcoming craft fairs with booth fees and deadlines, and use the booth ROI calculator to see which shows actually pay off.
Last reviewed: June 2026. Tax rules change, so confirm figures against the IRS links above. Spotted something out of date?