Masi
Congratulations on starting your online art business! Transitioning your passion into a side business comes with some important tax considerations, so it’s great that you’re addressing this early.
First, your tax obligations depend on where you’re located and how much income you’re earning. In many jurisdictions, you’ll need to report this activity as taxable income if your earnings surpass a certain threshold. You may also need to formally register your business, especially if you plan to operate regularly and professionally. Some locations require registering as a small business or obtaining a tax identification number. Additionally, if your sales reach a specific amount, you might need to register for VAT or similar taxes. It’s a good idea to check with your local tax authority for specific rules and thresholds.
On the topic of deductions, you can typically claim expenses directly related to your work. This includes the cost of art supplies, such as paint, brushes, and canvases, which are essential to creating your artwork. Shipping expenses, like packaging materials and postage for delivering your work to customers, are also deductible. If you spend money on maintaining a website, paying for advertisements, or covering marketplace fees, these would count as business expenses as well. If you use part of your home exclusively for your business, you might qualify for a home office deduction, allowing you to deduct a portion of rent, utilities, or maintenance costs.
