Every year or two, a headline says the IRS is about to send 1099-Ks to anyone who sells $600 worth of stuff online. Every year or two, resellers panic, then the rule quietly changes again. Here's where things actually stand, and what it means for what you owe.
The threshold, as of now
For 2025 and 2026, a marketplace or payment platform is only required to send you a Form 1099-K if you crossed $20,000 in gross payments and more than 200 transactions on that platform in a calendar year.
That's not a typo, and it's not the $600 figure you may have seen reported. The IRS spent a few years phasing toward a $600 threshold with no transaction minimum, delaying it repeatedly, before the 2025 tax legislation known as the One Big Beautiful Bill Act restored the older $20,000/200-transaction rule for good. Unless Congress changes it again, that's the standing rule for eBay, Poshmark, Mercari, Depop, and every other platform going forward.
Practically, that means most casual and even fairly active resellers will never see a 1099-K. Someone running $15,000 a year through Poshmark and another $8,000 through Mercari won't cross the threshold on either platform individually, even though their combined reselling income is well past what most people would call a hobby.
Why the threshold barely matters
Here's the part that trips people up: whether you receive a 1099-K has no bearing on whether the income is taxable.
The 1099-K is just a reporting mechanism. It tells the IRS how much a platform paid out to you, the same way a W-2 tells the IRS what your employer paid you. Not getting one doesn't mean the income is invisible or exempt. If you're running inventory through eBay, Poshmark, Depop, or any other platform with the intent of making a profit, that's business income, and the IRS expects you to report it whether or not any form shows up in your mailbox.
The flip side matters too: a 1099-K reports your gross payments, not your profit. If a platform sends you one for $22,000, that's not $22,000 of taxable income — it's $22,000 before you subtract what you paid for the inventory, shipping costs, platform fees, and other business expenses. Treating the 1099-K number as your income, rather than as a starting point, is the single most common mistake resellers make at tax time.
Selling your own stuff vs. running a business
Not everything you sell online is taxable. If you're clearing out a closet and selling your old phone, a couch, or clothes you no longer wear for less than you paid for them, there's no taxable gain — you're just recovering some of what you already spent. Casual, occasional sales of used personal items generally don't create a tax obligation.
That changes once you're sourcing items specifically to resell for a profit: thrifting to flip, buying wholesale lots, retail arbitrage, or running an actual store on any platform. At that point the IRS views it as a business regardless of whether you've formed an LLC, gotten a business license, or think of it as a "side hustle" rather than a job. See when an LLC actually makes sense for resellers if you're at the point where liability and banking start to matter too.
Schedule C: the form that actually matters
Resellers with business income report it on Schedule C, filed alongside the regular Form 1040. Schedule C is where the gross-vs-profit distinction gets sorted out. It has you list your total reselling revenue, then subtract deductible business expenses:
- Cost of the inventory you sold (cost of goods sold)
- Shipping supplies and postage
- Platform and payment processing fees
- A home office, if you have a dedicated space used regularly for the business
- Mileage for sourcing trips, thrift store runs, and post office visits
- Software and tools used to run the business
What's left after those deductions is your taxable profit, and it's also the number self-employment tax gets calculated on.
Filing Schedule C for the first time? e-file.com supports self-employment income and walks you through reporting reselling income and expenses without needing to hire an accountant for a straightforward return.
Self-employment tax
Beyond regular income tax, profit from reselling as a sole proprietor is subject to self-employment tax, which covers the Social Security and Medicare contributions an employer would normally split with you. It's calculated on Schedule SE and applies once your net self-employment earnings hit $400 for the year, a much lower bar than the 1099-K threshold.
This is the part that catches people off guard: even a reseller who never gets a 1099-K, and who owes relatively little in regular income tax, can still owe self-employment tax on a few thousand dollars of side income.
Quarterly estimated taxes
Employees have taxes withheld from every paycheck automatically. Resellers don't, unless they set it up themselves. If you expect to owe $1,000 or more for the year after accounting for any withholding or credits, the IRS expects quarterly estimated payments rather than one number in April — due in mid-April, June, September, and January for the prior year's fourth quarter.
Skipping these isn't just a cash-flow problem: the IRS can charge an underpayment penalty even if you pay the full balance by the April deadline. A rough rule of thumb: if reselling profit is a meaningful and growing part of your income, set aside 25–30% of profit as it comes in, and pay it quarterly rather than letting it pile up.
Don't want to handle bookkeeping and quarterly taxes yourself? 1-800Accountant pairs you with a dedicated bookkeeper and files your business taxes for you, including Schedule C, so quarterly payments and deductions don't fall on your plate.
The bottom line
The 1099-K threshold is a reporting rule, not a tax rule. Whether you clear $2,000 or $200,000 reselling, the profit is taxable, it belongs on Schedule C, and self-employment tax kicks in well before any 1099-K would ever show up. Track your costs as you go — inventory receipts, shipping, fees — so that whatever number a platform reports to the IRS isn't the number you end up paying tax on.
Frequently asked questions
What is the 1099-K threshold for 2026?
$20,000 in gross payments and more than 200 transactions on a single platform. Congress restored this threshold in 2025 after years of a planned drop to $600, which never actually took effect.
Do I owe taxes on reselling income if I don't get a 1099-K?
Yes. The 1099-K threshold only controls whether a platform is required to report your sales to the IRS. It has no effect on whether the income is taxable. You're required to report business income regardless of whether any form was issued.
What tax form do resellers use?
Schedule C, filed with your regular Form 1040. It reports your gross reselling income and lets you subtract business expenses like inventory cost, shipping, and platform fees, arriving at your actual taxable profit.
Do I have to pay taxes if I'm just selling my own used stuff?
Generally no, if you're selling personal items for less than you originally paid for them, since there's no gain. That changes once you're sourcing inventory specifically to resell for a profit, which the IRS treats as a business regardless of how small or casual it is.
Do resellers need to pay quarterly estimated taxes?
If you expect to owe $1,000 or more in tax for the year after withholding and credits, the IRS expects quarterly estimated payments rather than one lump sum in April. Most resellers with no separate day-job withholding fall into this category once reselling profit gets meaningful.