Guide · Tax year 2026 · Updated October 23, 2026

Etsy fees on Schedule C, line by line

Your Etsy monthly statement mixes sales, refunds, fees, ads, labels, sales tax and deposits in one list. On Schedule C they land on four or five different lines, and some rows don't belong on the form at all. Here is where each row goes, using the titles Etsy prints on the statement.

Statement rows → Schedule C · worked example

One year of statement rows, sorted by line

Example figures

1Gross receipts from the Orders CSV: order totals less sales tax	$14,000.00
2Returns and allowances	($380.00)
Partial refund to buyer for Order #…	$380.00
8Advertising	($640.00)
Etsy Ads	$400.00
Fee for sale made through Offsite Ads	$240.00
10Commissions and fees	($1,560.00)
Transaction fee: item title	$800.00
Transaction fee: Shipping	$104.00
Processing fee	$526.00
Listing fee	$96.00
Regulatory Operating fee	$46.00
Credit for processing fee	($12.00)
27bOther expenses: shipping labels	($1,150.00)
USPS shipping label	$1,120.00
USPS return shipping label	$30.00
Etsy profit before materials & other costs	$10,270.00

Made-up round numbers for the same shop as our 1099-K guide. Rows titled "Sales tax paid by buyer" ($910 here) and the deposit rows appear on the statement too, but on no Schedule C line. Materials come next: cost of goods sold, Part III.

Lines 1 and 2: sales and refunds

Line 1, Gross receipts or sales. Use what buyers paid for items and shipping, before Etsy's fees. Statement Sale rows ("Payment for Order #…") include the buyer's sales tax, which Etsy takes back out on a separate row, so the Orders CSV is the cleaner source: its order totals less sales tax.
Line 2, Returns and allowances. Rows titled "Partial refund to buyer for Order #…" go here, as a positive number. The IRS counts both cash refunds and price reductions. Don't also subtract them from Line 1.
Not on Line 2: "Refund to buyer for sales tax". That row only reverses the sales tax on a refunded order. The tax was never in Line 1, so its refund isn't on Line 2.

Line 10: Etsy's fees, less fee credits

Line 10 is "Commissions and fees". On current statements every Etsy fee is its own row of type Fee, with the order or listing number in the Info column. Add up these titles:

"Transaction fee: item title" and "Transaction fee: Shipping". Etsy charges the transaction fee on the item and on the shipping separately, so one order has two rows.
"Processing fee", one row per order. On current statements it isn't on the Sale row, so a total of the Fee rows is the only way to get it.
"Listing fee", with the listing number in the Info column instead of an order number.
"Regulatory Operating fee". Etsy charges it and you pay it to Etsy. Line 23's "regulatory fees" are fees paid to state or local governments, so ShopYear keeps this one on Line 10 with Etsy's other fees.
Fee credits reduce Line 10. "Credit for processing fee", "Credit for transaction fee on …", "Credit for listing fee" and "Credit for Regulatory Operating fee" are positive Fee rows, for example on a refunded order. Subtract them from your fees; don't add them to income.

Line 8: Etsy Ads and Offsite Ads

"Etsy Ads" rows are type Marketing and go on Line 8, Advertising.
"Fee for sale made through Offsite Ads" is charged per sale, so it reads like a fee, but it pays for advertising. ShopYear puts it on Line 8. The IRS instructions don't name it; what matters is that you deduct it once, on one line.

Shipping labels: Line 18 or Other expenses

Labels bought on Etsy are type Shipping, titled for example "USPS shipping label" or "USPS return shipping label". No Schedule C line names shipping labels, but the instructions point to two places:

Line 18, Office expense. The instructions say to include "office supplies and postage" there.
Other expenses, Part V. For expenses "not deducted elsewhere on Schedule C", listed by type, with the total carried to Line 27b.

ShopYear shows labels on their own line under Other expenses so you can see the figure. Pick one line with your tax software or preparer, and don't count labels twice.

Older guides say Line 27a. On the 2025 form, Other expenses moved to Line 27b, and 27a is now the energy efficient commercial buildings deduction.

Rows that stay off Schedule C

"Sales tax paid by buyer" and "Refund to buyer for sales tax" (type Tax). Where Etsy collects and remits sales tax for you, the tax is left out of your 1099-K and isn't your income. The IRS says sales tax imposed on the buyer that a seller collects and pays over is neither gross receipts nor a deductible expense.
Deposits, such as "$15.34 sent to your bank account". A deposit moves your own money from Etsy to your bank. It isn't income or an expense.
"Card Payment" rows (type Payment), where you paid your Etsy bill by card. The fees that bill covered are already in the Fee rows, so counting the payment too would deduct them twice.
"Charge for refund" rows, where Etsy charged you to fund a refund your balance couldn't cover. The refund itself is already on Line 2.

Collected sales tax yourself instead of through Etsy? The IRS rules for that are different; check them with your tax software or preparer.

Sources

IRS, Instructions for Schedule C (Form 1040) (2025): Lines 1, 2, 10, 18 and 23, Part V other expenses, and the move of Other expenses to Line 27b.
IRS, Schedule C (Form 1040), 2025 form: line labels, including Line 8 Advertising and Lines 27a and 27b.
Etsy Help Center, 1099-K article 360016389293: sales tax Etsy collects and remits is left out of the 1099-K.
Statement row types and titles (Fee, Marketing, Shipping, Tax, Payment and deposit rows, and the fee credit titles): public open-source Etsy statement parsers and their test fixtures, as recorded by ShopYear's format research.

Line numbers are from the 2025 Schedule C, the latest published when this was written; the IRS can renumber lines. Etsy can rename statement rows. If something here no longer matches, tell us. This guide is not tax advice; check your return with your tax software or a tax professional.