Free · Etsy sellers

Can I deduct this?

Swipe through 22 real expenses every Etsy seller runs into — shipping labels, photo backdrops, Cricut blades, COGS materials. Find out which the IRS lets you write off.

Tax deduction swipe
22 expenses. Personal or deductible?

For each card: would the IRS let an Etsy seller write this off? Tap the buttons (or swipe the card) to guess. We'll show you the answer + explanation after each one.

  1. Swipe right or tap Deductible if you think an Etsy seller can claim it.
  2. Swipe left or tap Personal if it's a personal expense.
  3. At the end, you'll see all 22 with the IRS-aligned verdict + reasoning.
Estimate only — not tax advice

Verdicts are based on IRS Pub 535 (Business Expenses) and Pub 463 (Travel, Gift, and Car Expenses). Real-world deductibility depends on your usage, documentation, and method (standard mileage vs actual expenses). Verify with a licensed tax pro before claiming anything on a return.

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Nice work. Here's the IRS-aligned breakdown for all 22 expenses.

Important — verify before claiming

These verdicts reflect typical IRS treatment under Pub 535 and Pub 463. Your specific situation (business-use %, recordkeeping, mileage vs actual-expense method) can change the answer. Always confirm with a licensed tax pro before deducting anything on your return.

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How Etsy seller deductions actually work

If you sell on Etsy — handmade goods, vintage finds, digital downloads, or print-on-demand — you're self-employed. You file a Schedule C, you pay self-employment tax on net profit, and you can deduct ordinary and necessary business expenses against your sales.

The IRS test for any business deduction is whether it's ordinary and necessary for your trade. For an Etsy seller, that usually means: things directly tied to making, photographing, packaging, and shipping product (materials, tools, shipping labels, Etsy fees, listing photos) are clearly deductible. Personal lifestyle expenses (gym, your own coffee, a winter coat you wear all year) usually aren't, even if you can rationalize them.

The COGS wrinkle Etsy sellers get wrong

Materials that go INTO your finished product (yarn, beads, fabric, wood, resin, blank mugs, printer ink for prints) are cost of goods sold — reported on Schedule C Part III, not as a regular expense. Tools you use repeatedly (Cricut, sewing machine, kiln) are usually depreciated or Section 179'd separately. Etsy and PayPal fees, listing fees, and promoted listing spend are normal Schedule C expenses on Line 17 (Legal & Professional) or Line 8 (Advertising).

If you sell physical goods, you also need to track ending inventory at year-end — the materials and finished pieces sitting in your studio on Dec 31. Most Etsy sellers under the $30M small-business threshold can use the cash method and treat all materials purchased in-year as COGS, which is simpler. Confirm with your tax pro.

What this tool isn't

This is an educational swipe — not tax advice. Real deductibility depends on how you actually use the item, what records you keep, and whether the item is COGS, an expense, or a depreciable asset. The verdicts here are based on IRS Pub 535 (Business Expenses) and Pub 538 (Accounting Periods and Methods) as of 2026. Verify with a licensed tax pro before claiming any deduction on your return.