Do I need to report small Etsy income on my taxes if I only made a few hundred dollars?

Hi! Yes—generally you still need to report Etsy income on your tax return even if it’s only a few hundred dollars, because the IRS expects you to report all taxable income whether or not you got a tax form (like a 1099-K).

A couple of key points to keep it simple:

• 1099-K “thresholds” don’t decide whether you report the income. They only affect whether Etsy is required to send a form. You can be below the 1099-K threshold and still be required to report your Etsy sales/profit.
• If this was a real business activity (you were trying to make a profit, listing regularly, pricing like a business, etc.), you usually report it on Schedule C (your Etsy shop is typically treated as a sole proprietorship). You’ll report your income and can deduct ordinary business expenses (fees, shipping labels, supplies, etc.).
• If your net profit (income minus expenses) from self-employment is $400 or more, you generally also owe self-employment tax and will file Schedule SE. If it’s under $400, you may not owe self-employment tax, but the income can still need to be reported.

On your second question: there usually isn’t a special “I started a new business” checkbox you must mark on a normal individual return. The way you “indicate” it is simply by including Schedule C for the first time (if it’s a business). If it was more of a hobby than a business, you’d typically report the income as “other income” instead (and hobby expenses generally aren’t deductible on federal returns under current rules).

If you tell me what tax year you’re filing for (for example, 2025 or 2026) and whether your “few hundred dollars” is profit or sales, I can point you to the cleanest, most common way Etsy sellers report it.