Print on Demand Taxes 2025: Updated Guide to Reporting, Sales Tax, and Compliance

 Handling Taxes When Selling Print on Demand Products in 2025

Taxes are a top concern for every print-on-demand entrepreneur. The rules keep changing, especially with new digital sales tax regulations and updates to reporting laws arriving in 2025. Getting taxes right not only keeps your business compliant but also protects your profits and reputation.

Understanding how tax changes affect online sales is essential. Recent updates, including stricter income reporting requirements and varying state sales tax rates, mean you can't afford to guess your way through the process. In this guide, you'll find clear and practical advice to help you manage your tax responsibilities as a POD seller.

If you're looking to scale your online business or avoid common financial mistakes, this post offers knowledge and steps you can use right now. Stay informed so you make confident decisions during tax season and beyond.

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Understanding Tax Obligations for Print on Demand Businesses

Print on demand (POD) businesses, whether operated from home or as part of a growing enterprise, face unique tax requirements. Selling custom T-shirts, art prints, tote bags, or other goods with on-demand production calls for a strong grasp of three main tax areas: income tax, sales tax, and self-employment tax. 

Each plays a key role in your financial planning and compliance, helping ensure your business keeps more of its hard-earned profits.

Photo by Leeloo The First

Income Tax Requirements for POD Sellers

Every print on demand seller must report earnings accurately to the IRS, even if you run your shop from a spare bedroom. The profit from your POD business is your total sales minus all business expenses. These profits are considered taxable income, no matter if you use Etsy, Printful, or your own website.

To prepare for tax time:

• Keep detailed records: Save all invoices, receipts, platform payouts, and shipping costs. Use a spreadsheet or accounting software to track everything throughout the year.
• Understand common deductions: POD business owners can often deduct software subscriptions, marketing expenses, shipping supplies, design tools, and even part of your home office. Detailed expense tracking can help lower your taxable income.
• Familiarize yourself with the 1099 form: In 2025, expect tighter enforcement of 1099-K reporting, with platforms sending this form if your sales pass $600 in gross payments. The IRS and your state will receive copies, so double-check your records match up.

For an in-depth look at deductions and IRS requirements, explore resources like this tips for print on demand taxes 2025 guide, which breaks down forms, thresholds, and organizing financial documents for tax season. Etsy sellers can also find helpful tips in this comprehensive guide on Etsy taxes for 2025.

Sales Tax Rules and Compliance in 2025

Collecting and remitting sales tax as a print on demand seller depends on where your buyers live and how much you sell into each state. Most states require sales tax on physical goods shipped to their residents. If you make enough sales into a state—even if you never set foot there—you may establish “economic nexus,” which triggers tax registration and collection obligations.

Key points to review:

• Shipping across states: If you sell to customers in other states, you may need to collect that state’s sales tax once you hit sales or transaction thresholds.
• Marketplace facilitator laws: Major POD platforms like Etsy, Redbubble, and Printful often collect and remit sales tax on your behalf, but not always. Know what your platform does—and does not—handle.
• 2025 updates to economic nexus laws: States update their economic nexus thresholds and compliance rules regularly, making it important to stay alert to changes.

The Economic Nexus State by State Chart lists the most current requirements. To see what has changed for 2025, check this summary of 2025 sales tax changes for ecommerce sellers. For fundamentals, Sales Tax 101 for Online Sellers offers important basics.

Self-Employment Tax and Social Security

POD business owners are considered self-employed, even if they’re the only employee. This means paying not just federal and state income taxes, but also self-employment tax—covering both Social Security and Medicare.

• Self-employment tax rate: For 2025, the rate is 15.3% (12.4% for Social Security on the first $176,100 in net earnings, plus 2.9% for Medicare).
• Quarterly payment requirements: If you expect to owe $1,000 or more in taxes for the year, the IRS requires estimated payments every quarter to avoid penalties.
• Recordkeeping: Use your net profits to estimate what you owe and set aside money during the year.

You can find detailed guidance in the IRS Self-Employment Tax guide and this practical explanation of self-employment tax rates and calculation for 2025. For official policy on Social Security for small business, read the SSA publication for self-employed workers.

Building a print on demand business means taking these tax types seriously from the start—reporting all income, getting deductions right, collecting correct sales tax, and paying self-employment tax on time. For more strategies to safeguard your business and boost your profits, check out the guide on avoiding common print on demand business mistakes.

Collecting and Remitting Sales Tax on Print on Demand Platforms

Collecting and paying sales tax is a key part of staying compliant as a print on demand (POD) seller in 2025. Major platforms and state laws have changed how sellers must approach tax collection, often streamlining the process but not always removing your responsibilities. 

Below, learn how top POD platforms handle sales tax, what sellers must do to register properly, and how to keep records that will make tax season far less stressful.

Platform Sales Tax Automation and Marketplace Facilitator Laws

Over the past few years, marketplace facilitator laws have transformed the way online sales tax is collected. Most states now require large ecommerce platforms to handle sales tax collection and payments themselves, shifting some of the burden away from individual sellers.

Here’s how three major POD platforms compare:

• Printful: As a production partner that integrates with Shopify, Etsy, WooCommerce and more, Printful does not always collect or remit sales tax for you. In certain states, they collect sales tax on direct Printful.com orders, but for shop owners using their own website (like Shopify), you remain responsible for collecting and paying sales tax based on your store’s sales.
• Redbubble: As a dedicated marketplace, Redbubble collects and remits sales taxes for most US states (where required). This means your buyers pay sales tax at checkout, and Redbubble handles payment to each state. You do not need to remit sales tax separately for your Redbubble shop, but you may still be responsible for reporting this income.
• Shopify: Shopify itself is not a marketplace, but a platform; the sales tax responsibilities fall to the shop owner. You need to turn on tax collection in your Shopify settings, tell the system which states you have nexus in, and remit the collected taxes to state authorities yourself. Shopify provides tools and guidance to help, but does not file or pay these taxes for you.

Photo by Towfiqu barbhuiya

Some platforms such as Teespring and Zazzle now automatically collect sales tax for all marketplace transactions, aligning with new laws to reduce risk for both buyers and sellers. For sellers with their own branded websites using Printful or Shopify, state laws regarding economic nexus (how much you must sell before you owe tax) mean that staying up to date with thresholds is crucial. The laws are different in every state, so review your state’s requirements regularly.

To keep up with changes, check your platform’s tax documentation and updates. Many sites maintain up-to-date help articles or email sellers about tax changes each year.

Registering for Sales Tax Permits

Even though most print on demand marketplaces handle tax collection for you, selling from your own site means you may need to register for a sales tax permit in every state where you reach economic nexus.

Here’s how to figure out if, and where, you need a permit:

1. Review your sales by state: Track where you ship products. Once you reach a state’s economic nexus threshold (often $100,000/year in sales or 200 separate transactions), you must register for a permit there.
2. Register online: Most states allow online registration through their Department of Revenue websites. Prepare to provide your name (or business name), address, EIN (Employer Identification Number), and estimated sales.
3. Watch for multi-state requirements: Some sellers hit nexus in several states, especially during high sales periods. Separate permits and filings are required in each state.

Common pitfalls to avoid:

• Missing new thresholds: States frequently change thresholds or tax rules. Review them at least once per year.
• Procrastinating on registration: Delay can lead to missed collection, unpaid taxes, and stiff penalties.
• Incorrectly assuming platforms handle all tax obligations: If selling through Shopify or via your own branded store, double-check your own responsibilities.

Consider using tax automation software like TaxJar, Avalara, or Taxify—these tools can track nexus thresholds, calculate owed taxes, and even file returns for you. They are especially helpful if you sell across multiple platforms or states.

Recordkeeping and Receipts for Tax Season

Strong recordkeeping is the best way to reduce stress and potential errors at tax time. Whether you automate your taxes or file manually, saving the right documents can make all the difference.

Key items you should keep:

• Digital copies of all sales receipts and invoices: Download from each platform’s dashboard monthly or quarterly.
• Payout reports: Platforms such as Redbubble or Printful let you export payout histories. Keep these for your accountant or self-filing.
• Shipping records and supplier invoices: Keep digital or paper proof for all expenses tied to sales and production costs.

Photo by Towfiqu barbhuiya

Best practices:

• Use cloud storage platforms (Google Drive, Dropbox) to back up all records.
• Scan or photograph paper receipts and store them with digital files.
• Set a recurring monthly review to update, sort, and backup sales tax records.

Digital recordkeeping now prevails, but keep original paper receipts for important deductions such as equipment or large supply purchases. Backing up both digital and scanned files protects you if your device is lost or there’s a software issue.

Finally, when you maintain well-organized documents, you streamline annual income reporting, sales tax return filings, and make audits (if ever needed) much less daunting. 

Collecting and remitting sales tax as a print on demand seller can feel complicated, but knowing your responsibilities on each platform, registering properly, and keeping your paperwork in order minimizes surprises and keeps your business on solid ground.

Filing Taxes as a Print on Demand Entrepreneur

Tax filing is a defining part of running a print on demand business, regardless of size or years in operation. Staying ahead means more than just adding up receipts at year-end. 

Print on demand sellers face quarterly deadlines, expense tracking challenges, decisions on self-preparation versus hiring an expert, and the need to steer clear of expensive missteps. 

Knowing what to watch for and where to find help will set your business up for long-term success.

Photo by Leeloo The First

Quarterly Estimated Taxes

Print on demand entrepreneurs do not get taxes withheld from payouts the way traditional employees do. Instead, you must pay estimated taxes on profits four times a year. Missing or shorting these payments can result in interest charges and IRS penalties that drain your earnings.

Key deadlines for quarterly estimated taxes in 2025:

• April 15 (for income earned January through March)
• June 16 (for income earned April through May)
• September 15 (for income earned June through August)
• January 15, 2026 (for income earned September through December)

To calculate what you owe, total your expected annual profit, subtract business expenses, and estimate 25-30% of the remainder for federal income and self-employment tax. Use IRS Form 1040-ES, or let accounting tools like QuickBooks Self-Employed, FreshBooks, or tax software automate the process. The IRS provides a comprehensive guide on making estimated payments for businesses.

Consequences for missing estimated taxes:

• Penalties may apply if you pay under 90% of your yearly tax bill by quarterly deadlines.
• The IRS charges interest on late or underpaid amounts, making tax debt grow.
• Falling behind one quarter makes catching up harder, especially for sellers with fluctuating volume.

Staying disciplined with automated reminders and setting aside funds from each payout can help prevent surprises at tax time.

Choosing Between DIY and Professional Tax Help

Print on demand taxes can be managed alone using modern tools, but complex finances or multi-state obligations may call for expert advice.

Benefits of self-filing:

• Saves on accountant fees.
• Direct control of your records.
• Access to DIY software such as TurboTax Online or highly rated platforms covered in this PCMag roundup.

Drawbacks of self-filing:

• Easy to overlook deductions for platform fees, Internet expenses, or design assets.
• Missed filings or incorrect forms may trigger audits or penalties.
• DIY options may lack the nuance needed for multi-state sales or VAT overseas.

Benefits of hiring a tax professional:

• Strategic tax planning year-round, not just at filing time.
• Knowledge of current IRS rules for ecommerce and print on demand income.
• Thorough handling of state, local, and sales tax issues.

Drawbacks:

• Service fees for tax preparers or CPAs.
• Need to share sensitive business data with an outside party.

Look for accountants who focus on ecommerce or small business, such as:

• Specialized ecommerce CPAs.
• Bookkeeping services familiar with Etsy, Shopify, and POD platforms.
• Online platforms like Bench or in-person services with verifiable reviews.

For many sellers, investing in a tax professional for the first year or two pays off through better deductions and peace of mind.

Common Tax Mistakes for POD Sellers to Avoid

Print on demand entrepreneurs sometimes repeat the same avoidable errors year after year. Steer clear of these pitfalls to keep your business out of tax trouble:

Frequent mistakes:

• Failing to record all expenses: Skipping deductions for software, graphics, or home office costs increases your tax bill.
• Underreporting income: Forgetting to declare payouts from smaller platforms or international sales raises audit risks.
• Missing state filing requirements: Multi-state sales can trigger extra filing needs. Register as soon as you hit a state’s sales or transaction threshold.
• Not tracking inventory or cost of goods sold: Even with POD, knowing what income relates to which expense matters for sound reporting.

Tips to stay compliant:

• Use cloud accounting apps for daily expense tracking.
• Save all platform payout reports and 1099-Ks.
• Check annually whether states have changed sales tax rules.

For a complete breakdown of business errors to avoid, see these tips on print on demand mistakes and best practices.

Staying engaged and informed about tax requirements allows print on demand businesses to grow confidently, knowing their financial foundation is secure.

Conclusion

Managing taxes for print on demand sales in 2025 means paying close attention to income reporting, state sales tax rules, and self-employment obligations. Setting up reliable bookkeeping, tracking nexus thresholds by state, and planning for quarterly estimated payments help you avoid surprises and minimize penalties.

Taking active steps now improves your profit margins and gives you more confidence as your business grows. For more ways to increase earnings and sidestep costly errors, review the guide on print on demand mistakes and best practices.

Thank you for reading. Consider sharing your experience or questions about POD taxes in the comments to help others in the community.