Quick Answer
Report all Etsy and Amazon income on one Schedule C form, combining your total revenue ($50,000 from both platforms = $50,000 reported income). Deduct all platform fees separately: Amazon's ~15% referral fees and Etsy's 6.5% transaction fees are fully deductible business expenses.
Best Answer
Alex Torres, Gig Economy Tax Educator
Established Etsy sellers who have added Amazon as a second sales channel
Combine platforms on one Schedule C
When selling on both Etsy and Amazon, report all your income on a single Schedule C (Profit or Loss from Business). Don't create separate Schedule C forms for each platform — the IRS wants to see your total business activity combined.
Income reporting strategy
Add up your gross sales from both platforms for Line 1 of Schedule C. Here's how to handle the numbers:
Example: 2026 Sales
Important: Report gross sales, not net sales after fees. The platform fees become deductible expenses on other lines of Schedule C.
Platform fee deductions breakdown
Both platforms' fees are fully deductible business expenses, but categorize them properly:
Amazon fees (Line 10 - Commission and fees):
Etsy fees (Line 10 - Commission and fees):
Total deductible platform fees: $8,665
1099-K form handling
You may receive 1099-K forms from both platforms, but the amounts might not match your records:
Critical: Report your actual sales numbers, not the 1099-K amounts. If there's a discrepancy, attach a statement explaining the difference.
Inventory and shared expenses
Many expenses benefit both platforms and should be allocated proportionally:
Shared deductions:
Platform-specific expenses:
Record keeping for dual platforms
Maintain separate tracking for each platform to support your Schedule C:
1. Monthly sales reports from both platforms
2. Expense spreadsheet with platform columns
3. Bank statements showing deposit patterns
4. Receipts for shared and platform-specific expenses
Self-employment tax calculation
Your combined profit from both platforms is subject to self-employment tax:
Example calculation:
What you should do
1. Download monthly reports from both Amazon Seller Central and Etsy
2. Create a combined income/expense spreadsheet
3. File one Schedule C with combined totals
4. Track platform-specific fees separately for accurate deductions
5. Consider quarterly estimated tax payments if profitable
6. Keep detailed records in case of IRS questions about 1099-K discrepancies
Key takeaway: Use one Schedule C to report combined income of $63,000, deduct $8,665 in platform fees separately, and pay 15.3% self-employment tax on your total profit from both platforms.
Key Takeaway: Combine all sales on one Schedule C, deduct each platform's fees separately (Amazon's 15% + Etsy's 6.5%), and pay self-employment tax on your total profit from both platforms.
Income and expense reporting for combined Etsy and Amazon selling
| Tax Item | How to Report | Example Amount |
|---|---|---|
| Etsy Gross Sales | Schedule C, Line 1 (combined) | $35,000 |
| Amazon Gross Sales | Schedule C, Line 1 (combined) | $28,000 |
| Total Business Income | Schedule C, Line 1 | $63,000 |
| Amazon Referral Fees (15%) | Schedule C, Line 10 | $4,200 |
| Etsy Transaction Fees (6.5%) | Schedule C, Line 10 | $2,275 |
| Combined Platform Fees | Schedule C, Line 10 | $6,475 |
| Other Business Expenses | Various Schedule C lines | $12,000 |
| Net Business Profit | Schedule C, Line 31 | $44,525 |
| Self-Employment Tax | Schedule SE | $6,814 |
More Perspectives
James Okafor, Self-Employment Tax Specialist
First-year sellers who started on one platform and recently added the second
Keep it simple: One business, one form
As a new seller, the most important thing to understand is that selling on multiple platforms doesn't complicate your taxes much. You're running ONE business that happens to sell through two channels.
The basic process
Step 1: Add up all your sales from both platforms
Step 2: Add up all your expenses (including platform fees)
Step 3: Report everything on one Schedule C
Step 4: Pay self-employment tax on your profit
Common beginner mistakes to avoid
❌ Don't create separate Schedule C forms for each platform
❌ Don't report only 1099-K amounts — report your actual sales
❌ Don't forget platform fees are deductible — they're business expenses
❌ Don't mix personal and business expenses — keep clear records
Your first-year reality check
Most new sellers aren't immediately profitable once you account for:
If you show a loss in your first year, that's normal and can offset other income on your tax return.
When you need to pay quarterly taxes
If your combined profit from both platforms exceeds $400, you'll owe self-employment tax and may need to make quarterly estimated tax payments. Track your running profit monthly to avoid year-end surprises.
The key is consistent record-keeping from day one, not complex tax strategies.
Key Takeaway: New sellers should focus on basic record-keeping: combine all income, deduct all expenses including platform fees, and file one Schedule C for both platforms.
James Okafor, Self-Employment Tax Specialist
People with regular jobs who sell on multiple platforms for extra income
Adding Schedule C to your W-2 return
Your multi-platform selling business gets reported on Schedule C, which attaches to the same Form 1040 where you report your W-2 wages. The combined income affects your total tax liability.
Tax bracket considerations
Since your W-2 income already puts you in a specific tax bracket, your selling profits get taxed at your marginal rate PLUS 15.3% self-employment tax.
Example: W-2 salary of $75,000 (22% bracket)
Quarterly payment strategy
With W-2 withholding, you might avoid quarterly payments if:
Year-end tax planning
By December, calculate your combined platform profit and consider:
The advantage of multi-platform selling as a side hustle: diversified income streams with similar tax treatment, all reported on one simple Schedule C.
Key Takeaway: Side hustlers add Schedule C profits to their W-2 income, paying marginal tax rate plus 15.3% self-employment tax on combined platform earnings.
Sources
- IRS Publication 334 — Tax Guide for Small Business (For Individuals Who Use Schedule C)
- IRS Schedule C Instructions — Instructions for Schedule C (Form 1040)
Reviewed by James Okafor, Self-Employment Tax Specialist on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.