Upcoming Etsy Requirement for International Sellers in 2023

Upcoming Etsy Requirement for International Sellers in 2023

Table of Contents:

1. Introduction
2. Background on Etsy and tax reporting
3. The new requirement for non-US citizen Etsy sellers
4. The importance of reporting taxes
5. Introduction to tax identification number (ITIN)
6. Steps to apply for an ITIN
7. Benefits of obtaining an ITIN
8. Differences between certified IRS agents and accountants
9. Applying for an ITIN as soon as possible
10. Considerations for registering an LLC
11. Reasons for non-US citizen Etsy sellers to register an LLC
12. Advantages of having an LLC
13. Different tax options for LLCs
14. Conclusion

Etsy's New Tax Reporting Requirement for Non-US Citizen Sellers

Are you a non-US citizen selling on Etsy with a store based in the US? If so, listen up! Starting January 2022, there will be a new requirement that you need to be aware of. In this article, we will discuss the upcoming requirement, the importance of tax reporting, and the steps you need to take to comply with the new regulation.

In the past, Etsy sellers were not obligated to report taxes to the IRS. However, this is about to change specifically for non-US citizens with a US-based Etsy store. From January 1st, 2022, if you are a non-US citizen selling on Etsy and your store is based in the US, the IRS will require you to report taxes if your earnings exceed $600.

To report your taxes accurately and fulfill your obligations to the IRS, you will need to obtain a tax identification number (ITIN). An ITIN acts similarly to a social security number but is specifically designed for non-US citizens. With an ITIN, you can file taxes, open a merchant payment gateway, and even open a personal bank account.

To apply for an ITIN, there are specific forms that need to be submitted to the IRS. It is recommended to consult an ITIN specialist or a certified IRS agent during the application process to ensure a higher chance of approval. Keep in mind that applying for an ITIN may take some time, so it is crucial to apply as soon as possible to avoid any delays or disruptions to your business.

Apart from the ITIN application, many non-US citizen entrepreneurs also consider registering a Limited Liability Company (LLC). This decision depends on your individual situation and preferences. Registering an LLC offers personal liability protection, credibility, and authority for your business. It also allows you to open a business bank account in the US and potentially benefit from different tax elections available for LLCs.

In conclusion, if you are a non-US citizen selling on Etsy with a US-based store, it is essential to be aware of the new tax reporting requirement that comes into effect in 2022. Applying for an ITIN and considering the registration of an LLC are crucial steps to ensure compliance and protect your business interests. Don't hesitate to consult a professional to guide you through the process and answer any specific questions you may have. Remember, it's better to be proactive and take the necessary steps now to avoid any complications in the future.

Highlights:

1. Etsy's new tax reporting requirement for non-US citizen sellers
2. Importance of reporting taxes accurately
3. Steps to apply for a tax identification number (ITIN)
4. Benefits of obtaining an ITIN for non-US citizen sellers
5. Considering the registration of a Limited Liability Company (LLC)
6. Advantages of having an LLC for credibility and asset protection
7. Different tax options available for LLCs
8. The significance of consulting certified IRS agents for ITIN applications
9. Timely application for an ITIN to avoid business disruptions
10. Professional assistance in navigating the requirements and process.

FAQ:

Q: What is the new tax reporting requirement for non-US citizen Etsy sellers? A: Starting January 2022, non-US citizens with a US-based Etsy store will be required to report taxes if their earnings exceed $600.

Q: What is a tax identification number (ITIN)? A: An ITIN is a tax number specifically designed for non-US citizens. It allows them to file taxes, open a merchant payment gateway, and open a personal bank account.

Q: Can I apply for an ITIN on my own? A: It is best to consult an ITIN specialist or a certified IRS agent during the application process to ensure a higher chance of approval.

Q: Why should I consider registering an LLC as a non-US citizen Etsy seller? A: Registering an LLC offers personal liability protection, credibility, and authority for your business. It also allows you to open a business bank account and potentially benefit from different tax elections.

Q: When should I apply for an ITIN? A: It is recommended to apply for an ITIN as soon as possible to avoid delays or disruptions to your business, as many other sellers may also be applying for tax identification numbers.