Big Cartel taxes come down to three separate obligations: federal income tax on your profit, self-employment tax of 15.3% on that same profit, and sales tax on customer orders. Big Cartel handles most U.S. sales tax automatically. The income tax and self-employment tax are entirely on you, and you generally need to pay them in quarterly installments rather than waiting until April.
Reporting Your Store Income on Schedule C
If you sell through Big Cartel as a sole proprietor, your store income goes on Schedule C, which attaches to your personal Form 1040.1Internal Revenue Service. About Schedule C (Form 1040) Gross receipts at the top of the form is every dollar customers paid you, whether through Big Cartel’s payment processors or any other channel. Subtract your cost of goods sold and business expenses, and what’s left is your net profit. That net profit is the number both your income tax and your self-employment tax get calculated on.
You may or may not receive a Form 1099-K from your payment processor. Under current law, a 1099-K is required only when your gross payments exceed $20,000 and you have more than 200 transactions in a calendar year.2Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill; Dollar Limit Reverts to $20,000 The IRS had been phasing in a lower $5,000 threshold, but the One, Big, Beautiful Bill Act retroactively restored the original $20,000-and-200-transaction standard.
Whether a 1099-K shows up in your mailbox doesn’t change what you owe. All gross business income belongs on Schedule C.3Internal Revenue Service. Understanding Your Form 1099-K Many Big Cartel sellers stay well below the reporting threshold and never see the form. That silence isn’t permission.
Self-Employment Tax on Your Net Profit
Employees split Social Security and Medicare taxes with their employer. When your income comes from your own store, you pay both halves. The combined self-employment tax rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare.4Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
The tax doesn’t apply to the full net profit. You first multiply your net earnings by 92.35% to get the taxable base.5Internal Revenue Service. Topic No. 554, Self-Employment Tax The 12.4% Social Security portion applies only to the first $184,500 of combined wages and self-employment earnings in 2026.6Social Security Administration. Contribution and Benefit Base The 2.9% Medicare portion has no cap.
You calculate this on Schedule SE, which attaches to Form 1040 along with Schedule 2. One built-in offset: you can deduct half of your self-employment tax when figuring adjusted gross income, which lowers your income tax though not the self-employment tax itself.5Internal Revenue Service. Topic No. 554, Self-Employment Tax
If net self-employment income exceeds $200,000 as a single filer, or $250,000 married filing jointly, an extra 0.9% Medicare tax applies to the amount above the threshold.7Internal Revenue Service. Topic No. 560, Additional Medicare Tax Wages and self-employment income are combined when applying the threshold, so a salaried job plus a growing store can push you across it faster than expected.8Internal Revenue Service. Questions and Answers for the Additional Medicare Tax
What Big Cartel Does and Doesn’t Handle for Sales Tax
Sales tax is separate from income tax and self-employment tax, and this is the area where Big Cartel does most of the work for you. The platform automatically calculates, collects, and remits U.S. sales tax on all orders shipped to or within the United States and Puerto Rico, as long as you’re selling in USD.9Big Cartel. Automatic Taxes
The gaps matter. In-person orders taken through Big Cartel’s mobile app don’t get automatic tax applied, so sales at craft fairs and pop-ups are on you. Certain home-rule jurisdictions, like some localities in Colorado and Illinois, impose local taxes the platform doesn’t cover.9Big Cartel. Automatic Taxes If you sell in a currency other than USD, automatic tax collection is disabled entirely.
Even where Big Cartel remits on your behalf, some states still want you to file a return reporting those sales. Check with your state’s department of revenue to see whether additional reporting is required beyond what Big Cartel files. If you also sell through your own site or in person, sales in those channels may create obligations to register in states where your combined activity has enough presence to trigger nexus.
Deductions Worth Claiming
Every dollar of legitimate business expense on Schedule C reduces both your income tax and your self-employment tax. E-commerce sellers usually have more of these than they realize.
Cost of Goods Sold and Platform Fees
Cost of goods sold is typically the biggest deduction: raw materials, direct labor if you pay someone to help produce your products, and production overhead. It has its own section on Schedule C and reduces gross receipts before other expenses are considered.
Platform costs are fully deductible business expenses. Your monthly Big Cartel subscription, payment processing fees from Stripe or PayPal, shipping costs, and packaging materials like mailers and tissue paper all qualify. Each charge looks small on its own, which is exactly why they’re easy to miss.
Home Office
If part of your home is used exclusively and regularly as your principal place of business, you can claim a home office deduction. The simplified method pays $5 per square foot of dedicated business space, up to 300 square feet, for a maximum of $1,500.10Internal Revenue Service. Simplified Option for Home Office Deduction The actual expense method applies your business-use percentage to rent or mortgage interest, utilities, insurance, and similar costs. Actual expenses often produce a larger deduction if the space is meaningful, but the simplified method saves hours of recordkeeping.
Mileage and Advertising
Advertising costs are fully deductible, including social media ads, a custom domain, and product photography or graphic design fees. Driving to the post office or to in-person selling events is deductible at the 2026 standard mileage rate of 72.5 cents per mile.11Internal Revenue Service. 2026 Standard Mileage Rates
Health Insurance
If Schedule C shows a net profit, you can deduct 100% of premiums for medical, dental, and vision insurance covering yourself, your spouse, and your dependents. This one goes on Schedule 1 as an adjustment to income, not on Schedule C.12Internal Revenue Service. Instructions for Form 7206 The catch: you can’t take it for any month you were eligible to participate in a health plan through an employer, whether yours or your spouse’s.
Retirement Contributions
Contributing to a retirement plan gives you a deduction now while building long-term savings. A SEP IRA allows contributions of up to 25% of your net self-employment earnings, with a maximum of $72,000 in 2026.13Internal Revenue Service. SEP Contribution Limits (Including Grandfathered SARSEPs) A Solo 401(k) allows an employee elective deferral of up to $24,500 if you’re under 50, plus an employer profit-sharing contribution of up to 25% of compensation, capped at the same $72,000 aggregate.
Qualified Business Income Deduction
Most Big Cartel sellers also qualify for the Section 199A deduction, which knocks up to 20% off qualified business income before income tax is calculated.14Office of the Law Revision Counsel. 26 USC 199A – Qualified Business Income Originally scheduled to expire after 2025, the deduction was extended and continues to apply in 2026. On a $40,000 net profit, that’s up to $8,000 off taxable income. It reduces income tax but not self-employment tax.15Internal Revenue Service. Qualified Business Income Deduction At higher income levels the deduction phases out and the rules tighten for certain service businesses, but the thresholds are high enough that a typical shop selling handmade goods or physical products rarely runs into them.
Quarterly Estimated Payments
Because no employer is withholding tax from your Big Cartel income, you’re expected to pay as you earn. The IRS requires estimated quarterly payments if you expect to owe $1,000 or more in federal tax for the year after any other withholding and refundable credits.16Internal Revenue Service. Form 1040-ES, Estimated Tax for Individuals
Payments are due four times a year on a schedule that doesn’t quite match calendar quarters:17Internal Revenue Service. Estimated Tax
- April 15, for income earned January through March
- June 15, for April and May
- September 15, for June through August
- January 15 of the following year, for September through December
When a due date falls on a weekend or federal holiday, it shifts to the next business day. Pay online through IRS Direct Pay or the Electronic Federal Tax Payment System, or mail a check with a Form 1040-ES voucher.
You avoid an underpayment penalty entirely if you pay at least the lesser of 90% of your current year’s total tax or 100% of the total tax on last year’s return. If your prior-year adjusted gross income was over $150,000 (or $75,000 if married filing separately), the 100% figure becomes 110%.18Office of the Law Revision Counsel. 26 USC 6654 – Failure by Individual to Pay Estimated Income Tax For a new store with unpredictable revenue, basing your payments on last year’s return is the simplest approach because the target stays fixed no matter how sales fluctuate.
Most states with an income tax also want quarterly payments, often on the same dates but with their own thresholds and safe harbor rules.
Records to Keep
Keep business tax records for at least three years from the date you filed the return. Underreport income by more than 25% of gross income and the IRS has six years. Don’t file at all and there’s no time limit.19Internal Revenue Service. How Long Should I Keep Records?
Save receipts for every business purchase, in a form you can actually retrieve. Digital records are fine if legible and organized. For each expense the file should show date, vendor, amount, and purpose. Open a separate bank account for your store income and expenses; the IRS recommends keeping personal and business transactions apart because it makes tax recordkeeping cleaner and audit defense easier.20FDIC Information and Support Center. Why Should I Keep My Business Account and My Personal Account Separate? A bank statement alone won’t substantiate a deduction, but clean statements backed by matching receipts will.