Jimmy Beans Wool is an online yarn retailer, not a tax or government program

Jimmy Beans Wool is a private company that sells yarn, knitting needles, crochet hooks, and related supplies through its website and physical locations. It is not a government program, tax form, or financial information resource. If you arrived here looking for tax information about yarn purchases, business deductions for craft supplies, or sales tax rules, those topics are covered separately on this site.

This page exists because yarn retailers sometimes appear in searches alongside tax and finance content. If you have a question about Jimmy Beans Wool as a business or customer, the information below may help. If your actual question is about taxes, deductions, or financial programs, use the search box to find the right guide.

Key Takeaways

  • Jimmy Beans Wool is a private yarn and craft supply company with an online store and physical retail locations, not a government or tax resource.
  • If you are researching yarn purchases for tax deduction purposes, you will need to track receipts and understand whether your crafting qualifies as a business or hobby under IRS rules.
  • Sales tax on yarn purchases varies by state and by whether the sale is in-person or shipped to you.
  • If you purchased yarn from Jimmy Beans Wool and need to report it on your taxes, keep your receipt and consult the appropriate tax guide for your situation.

When yarn purchases might matter for your taxes

Most people who buy yarn from Jimmy Beans Wool or any other retailer do not need to report the purchase on their taxes. Yarn for personal hobbies is a personal expense, not tax-deductible.

However, if you sell items you knit or crochet — scarves, blankets, sweaters, or other goods — and you do this regularly and intend to make a profit, the IRS may classify this as a business. In that case, your yarn purchases become business supplies, and you may be able to deduct them on Schedule C (Profit or Loss from Business) when you file your tax return. The line between hobby and business depends on factors like whether you keep records, whether you advertise, how often you sell, and whether you make a profit in most years.

If you think your crafting might be a business, keep all receipts from Jimmy Beans Wool and other suppliers. You will need them to calculate your deduction. The IRS has specific guidance on hobby versus business classification, and a tax professional can help you determine which applies to your situation.

Sales tax on yarn orders

When you order yarn online from Jimmy Beans Wool, whether you owe sales tax depends on two things: the state where you live and the state where Jimmy Beans Wool is located or has a physical presence.

Most states now require online retailers to collect sales tax on orders shipped to that state, even if the retailer is located elsewhere. Jimmy Beans Wool collects sales tax on orders shipped to states where it is required to do so. The tax rate varies by state and sometimes by county or city within a state. If you see sales tax added to your order, that is normal and is sent to your state government, not kept by the retailer.

If you are ordering yarn for a business and your state allows you to resell without paying sales tax (because you have a resale certificate), you would provide that certificate to Jimmy Beans Wool at checkout. Personal purchases do not may have access to for this exemption.

Keeping records if you run a yarn-based business

If you sell knitted or crocheted items and classify this as a business for tax purposes, you need to track your expenses. This includes yarn, needles, dyes, shipping materials, and any other supplies you buy specifically for items you sell.

Save your receipts from Jimmy Beans Wool and other suppliers. You do not need to submit them with your tax return, but the IRS can ask to see them if your return is audited. Keep them organized by year and category (yarn, tools, shipping, etc.). Many small business owners use a straightforward spreadsheet or a bookkeeping app to track these expenses throughout the year.

When you file your taxes, you will report your total yarn and supply expenses on Schedule C. The IRS allows you to deduct the full cost of supplies you actually used to make items you sold in that tax year. If you have leftover yarn at the end of the year, you can deduct only the yarn you used, not the yarn you still have on hand.

Distinguishing between hobby and business for the IRS

The IRS uses a "profit motive" test to decide whether your crafting is a hobby or a business. You do not need to be making money every year, but you need to show that you intend to make a profit and that you are running it like a business.

Signs the IRS looks for include: you keep detailed records, you have a separate space for your work, you advertise or actively market your items, you have a business name or social media presence, you set prices based on materials and time, and you have made a profit in at least three of the last five years. If you have only one or two of these, the IRS may still classify you as a business if your intent is clear. If you have none of these, your crafting is likely a hobby, and you cannot deduct expenses.

This matters because if the IRS reclassifies your business as a hobby during an audit, you lose all your deductions for yarn and supplies. If you are unsure, a tax professional or a Small Business Administration resource can help you document your business intent before you file.

Reporting income from selling handmade items

If you sell knitted or crocheted items, you must report the income on your tax return, regardless of whether you classify yourself as a business or a hobby. The difference is that a business can deduct expenses, and a hobby cannot.

If you sell through a platform like Etsy, that platform may issue you a Form 1099-K if your sales exceed a certain threshold (the threshold varies by year and payment processor). You will receive a copy and so will the IRS. You must report this income on your return. If you sell directly to customers or through other channels, you still must report the income, even if you do not receive a 1099-K.

Report your income on Schedule C if you are a business, or on Schedule 1 (Other Income) if you are a hobby seller. A tax professional can help you determine which applies and how to fill out the form correctly.

Frequently Asked Questions

Can I deduct yarn I bought from Jimmy Beans Wool if I knit for myself?

No. Yarn you buy for personal use — items you make for yourself or as gifts — is not tax-deductible. Only yarn you buy specifically to make items you sell for profit can be deducted, and only if the IRS classifies your crafting as a business, not a hobby.

Do I have to pay sales tax when I order yarn online?

Most likely yes. Most states require online retailers to collect sales tax on orders shipped to that state. The tax rate depends on your state and sometimes your county. Jimmy Beans Wool will show you the tax amount before you complete your order.

What if I sell a few scarves a year on Etsy — is that a business or a hobby?

It depends on your intent and how you operate. If you sell only a few items and do not keep records or advertise, the IRS may classify it as a hobby, and you cannot deduct yarn expenses. If you keep records, set prices intentionally, and show a profit in most years, it is more likely to be classified as a business. A tax professional can review your specific situation.

Do I need to report income from selling handmade items if I only made a small amount?

Yes. All income from selling items, no matter how small, must be reported on your tax return. The amount does not have to be large to be taxable. If you received a Form 1099-K from a payment processor, the IRS already has a record of the income.

What records should I keep from Jimmy Beans Wool purchases?

Keep your receipt or order confirmation showing the date, items purchased, cost, and any sales tax paid. If you are running a business, organize these by year and category. You do not need to send receipts with your tax return, but keep them for at least three years in case the IRS asks questions about your deductions.