Yes, money you make selling hobo nickels is generally taxable, whether it is a hobby or a business and whether or not a payment platform mails you a tax form. How much you actually owe depends on which of those two buckets you fall into. This is general education, not tax advice.
Before we go a step further: this article is a plain-language primer, not tax advice, and nothing here is written for your specific situation. Tax law changes, form line numbers get renumbered every year, and state rules vary wildly. For anything that touches your own return, talk to a CPA or an enrolled agent. With that said, here is the money-administration side of selling your carvings, kept strictly to the lane it belongs in. For what your work is worth and where to move it, see the companion guides on pricing your own carved hobo nickels and selling hobo nickels where and how. This piece is only about keeping the books and staying right with the taxman.
Do You Owe Taxes on Hobo Nickels You Sell?
Short answer: almost certainly, yes. Income from selling coins you carved is generally taxable, and that is true whether the activity is a casual hobby or a full side business, and whether or not any platform sends you a form at year end. A carver who sells $3,000 of work and never receives a single tax document still owes tax on that income.
What changes from person to person is not whether the income counts, but how it gets reported and how much of it you get to keep. That comes down to one fork in the road: are you a hobbyist or a business? Get that call right and the rest of your bookkeeping falls into place. Again, this is education, not tax advice, and the classification question in particular is one to walk through with a professional.
Hobby or Business? The Distinction That Decides Your Tax Bill
The IRS does not let you simply pick the label that saves the most money. Under Internal Revenue Code Section 183, whether an activity is a for-profit business or a not-for-profit hobby is decided on the facts, using a nine-factor test laid out in Treasury Regulation 1.183-2(b). The factors include whether you run the activity in a businesslike way with complete records, your expertise, the time and effort you put in, your history of income or losses, whether you depend on the income, and how much personal pleasure you get from it. No single factor controls the outcome; the IRS weighs the whole picture.
There is also a well-known safe harbor: if your activity turned a profit in three of the last five consecutive years, the IRS presumes it is a business, which shifts the burden of proof onto them. Treat that as a practical signal rather than a loophole. Most people carving a few nickels a month are genuine hobbyists, and dressing a hobby up as a business just to grab deductions is exactly the kind of move that invites a closer look. Decide honestly, and if you are on the fence, that is a conversation for your tax pro.
If It Is a Hobby: You Are Taxed on What You Take In
Here is the fact that most tax articles online still get wrong. Under older law, hobby expenses fell into a bucket called miscellaneous itemized deductions, and the 2017 tax law suspended that bucket on a supposedly temporary basis. The One Big Beautiful Bill Act, signed in July 2025, made that suspension permanent. In plain terms, for the foreseeable future a hobbyist is taxed on gross receipts with no deduction at all for the host coins, gravers, or supplies that went into the work.
Run the numbers and it stings. Sell $600 worth of carvings that cost you $400 in materials, and as a hobbyist you are taxed on the full $600, not the $200 you actually cleared. Hobby income is reported as other income on Schedule 1 of Form 1040, and the one bit of good news is that it is not subject to self-employment tax. Do not let anyone tell you the deduction is coming back after 2025. Under current law it is gone for good. As always, confirm the current form line with your preparer, since the IRS renumbers these yearly.
If It Is a Business: Deduct Your Costs, But Mind Self-Employment Tax
Flip to the other side of the fork and the math changes. A genuine for-profit carving or dealing activity reports on Schedule C, and there you get to deduct ordinary and necessary expenses against your gross receipts: host coins, gravers and tools, magnification and lighting, shipping supplies, marketplace and payment fees, even mileage to a show. You are taxed only on your net profit, so that same $600 sale with $400 of costs is taxed on $200, not the whole $600.
The catch, and it is a real one, is self-employment tax. Once your net Schedule C profit hits $400 or more, you owe self-employment tax at 15.3 percent, computed on Schedule SE, on top of your regular income tax. A business also means quarterly estimated payments and a higher recordkeeping bar. So this is a genuine trade-off, not a free upgrade: a business deducts its costs but pays that 15.3 percent and carries more paperwork, while a hobby is filing-simple but taxed on gross. Which comes out ahead depends on your volume and margin, and it is squarely a talk-to-a-pro decision.
The 1099-K: What Actually Changed, and What Did Not
If you sell through PayPal, eBay Managed Payments, Etsy Payments, or Venmo goods-and-services, you may get a Form 1099-K. For a couple of years the headline was a scary $600 threshold, and you will still find that number all over forums and blog posts. It is out of date. The 2025 law repealed it and restored the old rule: a platform issues a 1099-K only when your goods-and-services payments exceed $20,000 and you have more than 200 transactions in the year. Both conditions have to be met, and this applies to the 2025 tax year and forward.
Now the part that trips people up. That threshold is only about who mails you a form. It is not the line where income becomes taxable. Sell $3,000 of carvings across a handful of sales, receive no 1099-K at all, and you still owe tax on that $3,000. The higher threshold is a paperwork change, not a tax cut. Report your income based on your records, not on whether a form showed up in the mail.
Sales Tax: Online Marketplaces Handle It, Coin Shows Are on You
Sales tax splits neatly along one line: where the sale happened. Since the 2018 Wayfair decision, every state that charges sales tax has a marketplace facilitator law, and those have been universal since the start of 2023. Under them, eBay and Etsy automatically collect and remit sales tax on your online orders. For those sales you generally do nothing.
In-person and off-platform sales are a different story, and they are on you. Sell a hobo nickel at a coin show, from your own website, or hand to hand, and you may need to register for a seller’s permit in that state, charge the correct combined state and local rate, and remit it yourself. The marketplace is not in the loop. Whether an occasional or casual sale even requires a permit varies by state and sometimes by the show. Before you set up a table, check that specific state’s rules and ask the show promoter what they require. Do not assume one state’s answer applies everywhere, because it does not.
Simple Bookkeeping That Keeps You Straight
None of this is hard to stay on top of if you keep contemporaneous records, meaning you write it down as it happens, not in a panic each April. A basic spreadsheet or ledger with every sale (date, item, price, fees) and every cost (host coin, tools, supplies, shipping, show fees, mileage) covers you no matter how the hobby-versus-business call lands. Tracking material costs this way is worth the five minutes even for a pure hobbyist, because if your activity ever grows into a business, you already have the records to back up your deductions.
One more habit pays off out of all proportion: run the activity through a separate bank or payment account. It is one of the strongest businesslike signals under the Section 183 factors and makes any classification easier to defend. Keep your receipts, keep any 1099-Ks, and when the numbers get big enough to matter, bring in a CPA or enrolled agent rather than guessing. If you want a running start, our guide on pricing your own carved hobo nickels pairs naturally with a clean cost ledger, since the same numbers you track for taxes tell you whether your work is priced to actually make money.
Frequently Asked Questions
Do I have to pay taxes if I only sell a few hobo nickels?
Generally yes. Income from selling coins you carved is taxable regardless of the amount or whether any platform sends you a form. If the activity is a hobby, you are taxed on gross receipts with no deduction for materials under current law. The small size of the sale does not make it tax-free. Check your situation with a tax professional.
What is the 1099-K threshold now?
For the 2025 tax year and forward, a platform issues a Form 1099-K only when your goods-and-services payments top $20,000 and you have more than 200 transactions, and both conditions must be met. The earlier $600 rule was repealed. You still owe tax on your selling income whether or not you receive a 1099-K.
Can I deduct the cost of my gravers and host coins?
Only if your activity qualifies as a business reported on Schedule C, in which case tools, host coins, and supplies are deductible against your receipts. If it is a hobby, those expenses are permanently non-deductible after the 2025 law change, so you are taxed on what you take in with no offset for costs. A tax pro can help you decide.
Is selling hobo nickels a hobby or a business?
The IRS decides using a nine-factor test under Section 183, weighing whether you keep good records, your profit history, and how much you rely on the income. Most casual carvers are genuine hobbyists. A profit in three of the last five years presumes you are a business. It is a judgment call worth reviewing with an accountant.
Do I owe self-employment tax on my carving income?
Only if it is a business. Net Schedule C profit of $400 or more triggers self-employment tax at 15.3 percent, filed on Schedule SE, on top of income tax. Hobby income is not subject to self-employment tax, though it is still taxed as ordinary income. Whether business treatment is worth that cost depends on your numbers.