You will need to figure out the rate and collect it on all sales in your state to submit in the future. Read your state's laws on collecting tax for online sales.
 Buy receipt books from office supply stores that have carbon copies. Give the white copy to your customer and save all carbon copies for bookkeeping purchases.
 If you make more than a couple of sales each year, you should have a program that organizes your costs, inventory, prices, sales and more for easy bookkeeping.


Buy bookkeeping software, such as Quickbooks to keep your information all in 1 place. You can also try the online bookkeeping sites, Stitch Labs or Outright, which is intended for craft sellers. You can keep track of your sales from all venues, inventory, expenses and business contacts for a monthly fee of $10 to $25 per month. The advantage of these products is that they keep a double-entry system, the standard for accurate accounting.
If you do not make enough in sales to warrant the expense of bookkeeping software, keep very detailed spreadsheets. Keep a sheet for every month of the year. List reoccurring expenses, variable expenses, each individual sale and tax collected. Calculate your income on an ongoing basis, instead of waiting until the end of the month. If you do not know how to work formulas in a spreadsheet program, sign up to take a class with a community college, lifelong learning center or public library.
 Once you have a dedicated account, you are able to pay for expenses through the account and deposit your sales income. Your online statement will give you an opportunity to double check your accounting work to ensure your check book balances according to your spreadsheet or bookkeeping system.
 Don't allow your bookkeeping to get too far behind, so enter sales as soon as possible. Save your receipts in a file folder in chronological order.


If you use an online bookkeeping system, you may want to invest in a free online receipt tracking site like shoeboxed.com. You can scan all your receipts from both expenses and sales and save them under headings. This will eliminate the risk of losing your receipts, if you have them in 2 places.
 List the sales individually under the venue. Then, input the expenses associated with each individual fair, seller or online site to figure out the profitability of that venue.


Online and software bookkeeping programs should allow you to do this automatically by associating each sale and expense with a type of account. Use your spreadsheet or program to regularly assess your income and remove any channels that aren't profitable.
 Do not wait until the end of the year to find mistakes that can cost you money or put you at risk for an audit by the Internal Revenue Service (IRS).
 If you have large revenue from craft sales, you may be required to submit quarterly or bi-annual returns as well as yearly returns. Although this may take more time, it can allow you to pay taxes slowly, instead of in 1 lump sum.
 If you have a large amount of sales, receipts and expenses, then a tax professional is more likely to help you pay accurate taxes. By having a strong grasp of small businesses, an accountant may be able to save you money through tax credits and exemptions.
Research your state's sales tax.
Produce a receipt for all your sales.
Invest in inventory and accounting technology.
Open up a business checking account and a business credit card.
Enter your receipts into your spreadsheet or software program after fairs or after a week of online sales.
Keep a separate spreadsheet for each venue that you sell.
Reconcile your bank account, online marketplace and spreadsheet/bookkeeping records every month.
Keep a regular schedule of submitting sales and income tax.
Consider hiring an accountant.
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