After four years of threshold whiplash and “the IRS is coming for your $600” headlines, reseller tax rules for 2026 are actually… settled. The One Big Beautiful Bill Act (signed July 2025) permanently restored the federal 1099-K threshold to its old level, killing the planned $600 rule entirely. Here’s what that means in plain English — what triggers the form, what you owe regardless, and the record-keeping that turns tax season from panic into paperwork.
Quick disclaimer: this is general education, not tax advice — a good CPA or enrolled agent beats a blog post for your specific situation, and pays for themselves at reseller scale.
The 2026 Federal Threshold: $20,000 AND 200
For tax year 2026 (filed in early 2027), marketplaces like eBay, Poshmark, Mercari, and Depop send you — and the IRS — a Form 1099-K only if you exceed both $20,000 in gross payments and 200 transactions on that platform in the calendar year. Both bars, same platform: $48,000 across 150 sales gets no federal form; $15,000 across 300 sales gets no federal form either.
Two big caveats before you celebrate:
- About ten states have lower thresholds — including Massachusetts, Virginia, Vermont, Maryland, Illinois, and New Jersey among others — and platforms will issue state-driven 1099-Ks accordingly. Check your state’s current rule.
- The form is not the tax. This is the part that matters most:
⚠️ Hard Truth
No 1099-K does NOT mean no taxes. Profit from reselling is taxable from the first dollar, form or no form — the threshold only controls the paperwork the platform files, and 'I didn’t get a form' has never once worked as an audit defense.
✅ The Fix
Report your profit accurately every year and the threshold becomes irrelevant to you — which is exactly the position you want. The genuinely good news: taxed on PROFIT means every legitimate expense reduces the bill, and resellers have a lot of legitimate expenses. Track them and the system works in your favor.
Gross vs. Profit: The Math That Saves You
A 1099-K reports gross payments — not what you actually made. Your taxable profit is gross sales minus:
| Deduction | Examples |
|---|---|
| Cost of goods sold | What you PAID for inventory — thrift receipts, yard sale spending, estate lots |
| Platform & payment fees | eBay/Poshmark/Mercari final value fees, ad fees |
| Shipping costs | Postage you paid, mailers, boxes, tape, labels |
| Equipment & supplies | Scale, printer, lighting, cleaning supplies, storage bins |
| Mileage | Sourcing trips, post office runs — at the IRS standard rate; log the miles |
| Software & services | Cross-listers, bookkeeping apps |
| Home office & storage | If a space is used regularly and exclusively for the business |
A seller with $18,000 gross might have $7,000 in COGS, $2,700 in fees, $2,000 in shipping, and $800 in supplies — taxable profit closer to $5,500. Every untracked receipt is a deduction donated back to the IRS.
Three Situations, Three Answers
- Selling your own stuff at a loss (old clothes, that exercise bike): not taxable income — and the loss isn’t deductible either. Keep basic records showing what things originally cost if the numbers are large.
- Hobby-scale profit: still reportable income, but hobby classification blocks most deductions — an expensive place to be. Regular, profit-motivated selling generally belongs on…
- Business (Schedule C): the standard home for real resellers — full deductions, and self-employment tax (~15.3%) on net profit. Once profit is meaningful, quarterly estimated payments keep April painless and penalty-free.
Keep Records Like It Matters (It Does)
Keep everything at least three years from filing; seven is the safe habit. Download platform sales and fee reports quarterly rather than scrambling for year-old data. And if this Q4 goes the way your prep plan intends, consider a January consult with a CPA who knows resellers — the first year you owe real self-employment tax is the year professional advice stops being optional-feeling and starts being obviously worth it. Profitable enough to owe taxes is the goal, not the problem.