Marketplace sellers & custom goods

Books and taxes for Etsy sellers.

An Etsy Payments deposit already short its fees, a materials order from a supplier, a custom order deposit collected before the piece is made, and Etsy ads on top. Your own bookkeeper keeps it straight, an accountant checks every transaction, and you get one number a month.

Book a call What we handle
  • From $197 a month
  • An accountant on every transaction
  • Cancel whenever
DecemberExample month
$4,700
what you made

December came in at $4,700. Three custom order deposits landed this month for pieces you will ship in January, so I kept them as owed, not earned yet.

  • Etsy Payments depositShop sales
  • Custom order deposit, Sarah TCustom order deposits
  • Rio Grande materials orderMaterials
  • Etsy adsAdvertising
  • Etsy listing and transaction feesMarketplace fees
Money in$12,800
Money out$8,100
Set aside for taxes$1,300
An example month. Yours will have your numbers.

Why your books are different

Etsy shop books go wrong in a few specific spots.

A generalist sees one Etsy deposit. Your business is listing fees, transaction fees, and ad spend all taken out before it lands, materials bought in bulk that last for months, and custom order deposits that are not really sales yet. When the books do not know that, you cannot tell what a piece actually costs to make.

  1. 1

    Etsy's deposit already has three fees taken out

    Listing fees, transaction fees, and Etsy ad spend are all deducted before a payout lands. Booked as the deposit amount, both your real sale price and your real selling costs disappear.

    What we doBooks the full sale price as income and each Etsy fee as its own cost, so pricing and true margin both stay visible.
  2. 2

    A materials order covers months, not one sale

    A bulk order of beads, wire, wax, or fabric from a supplier gets used across dozens of future pieces. Booked all at once, that month looks like a loss and the following months look artificially strong.

    What we doKeeps bulk materials buys visible against the pieces they actually go into, so one big order does not read as a bad month.
  3. 3

    A custom order deposit is not a finished sale

    A deposit collected for a custom piece that has not been made or shipped yet is money owed, not money earned. Counted as income the day it lands, the books overstate what you actually made that month.

    What we doKeeps deposits as money owed against an order until the piece ships, so the sale only counts once it is real.
  4. 4

    Time and labor never show up in the cost of a piece

    Materials are easy to track, but the hours spent making each piece are not, so it is easy to price a piece as if only the materials mattered and miss whether the hourly return is actually worth it.

    What we doKeeps materials cost visible and clean, so pricing conversations with the accountant can factor in your time honestly.

Your categories

The categories Gus keeps for an Etsy shop.

Set up once for how Etsy pays you and what a piece costs to make. You never pick a category. He does, and an accountant checks it.

Money in

  • Shop salesRegular listings sold through your Etsy storefront.
  • Custom order depositsMoney collected up front for a made-to-order piece, kept as owed until it ships.
  • Wholesale ordersA boutique or shop buying a batch of your pieces at once.
  • In-person salesCraft fairs and markets rung up through Square.

Money out

  • MaterialsBeads, wire, fabric, wax, or other raw goods bought from a supplier.
  • Marketplace feesEtsy listing fees, transaction fees, and payment processing.
  • AdvertisingEtsy ads and any Meta or Pinterest spend driving traffic to the shop.
  • Packaging and shippingBoxes, tissue, branded inserts, and postage.
  • Tools and equipmentJewelry equipment, sewing machines, or other tools used to make pieces.
  • Craft fair and market feesBooth rent and vendor fees for in-person selling.

What we watch for you

  • Materials cost per piece

    What each piece actually costs to make, so pricing keeps up as supplier costs change.

  • Etsy fee percentage

    How much of each sale Etsy keeps in fees, so a pricing change can account for it.

  • Custom order deposit balance

    What is owed on pieces not yet made or shipped, so it never gets mistaken for cash you can spend.

  • The set-aside

    What you will owe, tracked every month, so April is a number you already knew.

Ask Gus

Things Etsy sellers ask Gus.

Text him like you would text anybody. He answers in plain English, and when a question is above his pay grade, an accountant looks and gets back to you.

My Etsy deposit is always less than what my listings show as sold. Why?

Listing fees, transaction fees, and any Etsy ad spend all come out first. I keep those tracked separately so you can see the real number behind each sale.

I took three custom order deposits this month for pieces I'm making in January. Does that count as December income?

Not yet. I keep deposits as money owed until the piece ships, so your December number only shows what you actually finished and sold.

I just bought a big bulk order of gemstones. Does that expense hit all at once?

I keep it visible against the pieces it actually goes into, so one big materials order does not make a good month look thin.

The tax side

The tax side of an Etsy shop.

Most of what goes wrong here is labels and timing. Deposits counted too early, materials bought in bulk, and fees that quietly reduce what a sale is really worth.

What your return has to get right

Your accountant signs it, so it gets done right the first time.

  • Inventory and materials costWhat was actually paid for materials used in pieces sold during the year, not just what was spent stocking up, is what counts against sales. Unsold materials on hand at year end change what the return shows as profit.
  • Form 1099-K from EtsyEtsy Payments issues a 1099-K once you cross $20,000 and 200 transactions. All income is taxable whether or not the form arrives.
  • Hobby versus businessA shop run with the intent to make a profit, with real records and effort, is treated as a business rather than a hobby. Keeping clean books is part of what supports that.
  • The pass-through deductionMost owner-operators can take up to 20 percent of business profit off their taxable income. It comes out right when the books are right all year.

Deductions Etsy sellers miss

Your bookkeeper knows what to look for in your statements. You never have to.

  • Materials and raw goods
  • Etsy listing and transaction fees
  • Etsy ad spend
  • Packaging and shipping supplies
  • Craft fair booth fees
  • Tools and small equipment
  • Photography props and backdrops
  • Business insurance
  • Home studio space
  • Continuing education and workshops
  • Shipping insurance
  • Business cards and tags

General information about 2026 federal rules, not advice for your business. Your accountant looks at your actual numbers before anything gets filed.

All year, not just April

An Etsy shop year, kept every month.

Custom orders come in whenever an idea does. Your taxes come on a schedule. Your team keeps you ahead of both. Every month in between, your bookkeeper closes the books and speaks up the moment something looks off.

  1. January

    Plan the year

    Last year's return gets started, custom order deposits from December are matched to what shipped, and you get a monthly set-aside so April is already handled.

  2. April

    Filed. Done.

    Your return is filed and signed. No surprise bill, because the set-aside has been running since January.

  3. July

    Halfway check

    Where you stand, what you will owe, and whether summer craft fair season changed the number.

  4. October

    Before the holiday rush

    Custom orders and shop traffic pick up fast before the holidays. Before it hits, Gus looks at what materials to stock up on and what to hold off buying.

What you get

Starts at$197a month

What you pay depends on what your business needs, and it does not move after that, busy season or slow. No hourly bills, no surprise invoices, no setup fee.

Book a call
  • Monthly bookkeeping

    Every transaction sorted into categories set up for Etsy sellers. You never categorize a thing.

  • An accountant checks every transaction

    Real review, every month, before your books close. Not a spot check.

  • Your business tax return, filed

    Prepared, reviewed, and signed by that same accountant every year.

  • The monthly number

    What you made, what you spent, what to set aside for taxes.

  • Your own bookkeeper

    A real person assigned to your business, in the app whenever you need them. No hold music.

  • On your books all year

    Every month, not just in April. Your team speaks up whenever something is worth your attention.

  • Cancel any time

    No contract. No cancellation call. Your books are yours.

Straight answers

Questions Etsy sellers ask first.

Do I owe sales tax on my Etsy sales?

Etsy collects and remits sales tax on most of its own marketplace sales as a facilitator. If you also sell through your own website, that part is usually still your job to register and collect.

How does Gus handle a custom order deposit taken in December for a piece I ship in January?

It is kept as money owed, not income, until the piece actually ships. That keeps December and January both honest instead of one month looking bigger than it was.

I sell at craft fairs in cash sometimes. Does that need to be tracked?

Yes. All income is taxable whether it comes through Etsy, Square, or cash in an envelope. Gus keeps craft fair sales in their own line so nothing gets missed.

Is my Etsy shop a hobby or a business for tax purposes?

That depends on how you run it, not how much you sell. Keeping real books, pricing to make a profit, and treating it like a business all support calling it one. The accountant can talk through where you stand.

My materials cost keeps going up. Can Gus tell me when to raise prices?

He tracks materials cost per piece so you can see it change. Deciding when to raise prices is a conversation worth having with your bookkeeper once the trend is clear.

My shop has been open two years and I never separated my personal and business spending. Is that fixable?

Yes. Send the bank and Etsy statements you have. Gus sorts out what belongs to the shop, and most sellers know where they stand within a week.

Is a real accountant checking my books?

Yes. You get your own bookkeeper, Gus does the first pass on every transaction, and an accountant checks every one before your month closes. That same accountant prepares, signs, and files your business return. Goatkeeper is not a CPA firm, and we never pretend a person looked when they did not.

What does it cost, and can I cancel?

It starts at $197 a month, depending on what your business needs. No setup fee, no hourly bills, no contract. Cancel any time from the app, and your books go with you.

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Book a call

Pick a time. That's the whole signup.

Fifteen minutes with a real person on our team. They look at where your books are, tell you straight what it takes to get caught up, and get you set up on the spot if it fits.

  • $197 a month to start
  • An accountant on every transaction
  • Cancel whenever