Do I need to report Etsy income under $600 in sales and profit?

Hi! Yes — in the U.S. you’re generally supposed to report your Etsy income even if it’s only a few hundred dollars and even if you don’t get a 1099-K. The “$600” number people talk about is mainly a payment-reporting form threshold, not a rule that makes small amounts “non-taxable.”

A couple of practical points that usually clear up the confusion:

• Income vs. self-employment tax: You report your Etsy profit on your tax return either way, but self-employment tax typically kicks in once your net profit is about $400 or more for the year. If your profit is under that, you may still report the income, but you usually won’t owe self-employment tax on it.
• You report profit, not just sales: Etsy fees, shipping you paid, materials/supplies, postage, and other ordinary business expenses generally reduce your taxable profit (as long as you’re running it like a business).

Do you need to “indicate you started a new business”?
Not in a separate registration-type way on your return. If you’re treating it as a business/self-employment, you typically just report it on the self-employment section (commonly Schedule C with your Form 1040) for the first year you operated. That’s essentially how you show the IRS it’s a new self-employment activity.

One last thing: if this was more of an occasional, not-for-profit craft situation (a hobby), the reporting can look different and you may not be able to deduct expenses the same way. But if you were selling with the intent to make a profit, an Etsy shop is commonly reported as self-employment.

If you tell me your rough numbers (total Etsy sales, Etsy fees, shipping charged vs. shipping you paid, and materials cost — no personal info), I can help you estimate what your “net profit” likely is and what that usually means for filing.