What happens if I don’t report my craft income?

It can feel harmless to skip reporting small amounts, especially if you were paid in cash. But the uncertainty hangs over you.

The IRS generally requires individuals to report all income earned from business activities, regardless of the amount. While certain thresholds (like the $600 1099-K limit) trigger automatic reporting from payment processors to the IRS, they do not necessarily define a vendor's individual tax liability. Additionally, while business expenses and reinvestments may reduce taxable profit, they do not automatically eliminate tax obligations. It is important to consult IRS Publication 334 (Tax Guide for Small Business) or a CPA to understand how self-employment taxes and income reporting apply to your situation.

Track sales and expenses consistently and report your net income each year. If you missed reporting in the past, consult a tax professional about amending returns or voluntary disclosure options. Proactive compliance is almost always the best path.