United States · Resellers · Explainer
Do you pay taxes on reselling?
When money from selling things is taxable income, when selling your own used items is usually not, and why a missing 1099-K does not change the answer.
Yes, money you make from reselling is income, and the IRS says you must report income whether or not you receive a Form 1099-K. Selling your own used belongings is different: the IRS pages describe a tax obligation when you sold personal items at a gain. Buying to resell is the business case, taxed on profit after costs.
Two situations that look the same on a platform
An eBay or Poshmark account can hold two very different kinds of sales. In the first you are clearing out things you own: clothes, furniture, a game console. In the second you buy items in order to sell them, which is a trade or business whatever the volume. The platform pays you the same way for both, which is why this question is confusing. The tax treatment depends on what you sold and why, not on the platform.
Reselling as a business: income is the profit
The IRS Form 1099-K page states that whether or not you receive a Form 1099-K, you must still report any income on your tax return. For a reseller, that income is generally reported on Schedule C as revenue, with the cost of goods sold, platform fees, shipping, supplies and other business costs subtracted. What remains is net profit, and that number drives both income tax and self-employment tax (15.3% on 92.35% of net profit once net earnings reach $400, per Publication 334 and Schedule SE). The reseller tax calculator runs those steps with your inputs.
Selling your own used items
The IRS 1099-K FAQs say the gross amount on a form does not account for the original purchase price, or basis, of the items you sold, and that you may have a tax obligation if you had a gain on the sale of goods. In plain terms, if you sold a used couch for less than you paid, there is usually no gain to report. If you sold a collectible for more than you paid, the difference can be taxable. The pages we retrieved do not walk through losses on personal items in detail, so confirm the treatment for your sale in the IRS instructions or with a preparer. Keep what you paid (receipts, order emails) because the form shows only the gross sale.
A short test of which one you are
| Question | Points toward personal sale | Points toward reselling business |
|---|---|---|
| Did you buy it to sell? | No, you owned it for your own use | Yes, you bought inventory |
| How often do you sell? | Occasionally | Regularly, with listings and restocking |
| Do you track costs and profit? | Rarely | Yes, per item |
| Intent | Declutter | Make a profit |
This table is a thinking aid, not an IRS test. The IRS decides business or hobby status from all the facts, so see Publication 334 and the IRS guidance for your case.
What to do next
- Collect your platform sales reports and any Form 1099-K. Understand how the form is built in 1099-K for resellers.
- Total your costs using the deductions and COGS checklist.
- Estimate what to set aside with the calculator, then plan payments with the monthly planner.
What this page does not cover
- Hobby-loss rules, sales of investments, collectibles or crypto, and vehicles.
- State income tax and sales tax rules.
- Anything about Canada. A Canadian version is out of scope here.
Sources (retrieved October 2026)
- IRS: Understanding your Form 1099-K
- IRS: Form 1099-K FAQs, general information
- IRS Publication 334, Tax Guide for Small Business
- IRS Topic no. 751, Social Security and Medicare withholding rates
- IRS Schedule SE (Form 1040) instructions
Cite this page: TNAADO Tools, "Do You Pay Taxes on Reselling?," tools.tnaado.ca/calculators/business/reseller-tax-calculator/do-you-pay-taxes-on-reselling/, checked October 19, 2026.
Frequently asked questions
Do I have to report money from selling on eBay if I did not get a 1099-K?
Yes if it is income. The IRS says that whether or not you receive a Form 1099-K, you must still report any income on your tax return. The form only reflects what a platform was required to send you.
Do I pay tax when I sell my used clothes for less than I paid?
The IRS pages on 1099-K describe a possible tax obligation when you had a gain on the sale of goods. A sale below what you paid does not produce a gain. Keep proof of the purchase price and check the IRS instructions for personal-use property before you decide how to report it.
Is reselling a business or a hobby?
It depends on the facts, including whether you buy to resell, how often you sell and whether you aim for profit. Publication 334 covers business income and expenses. A tax professional can help if your case is unclear.
Do I pay self-employment tax on reselling profit?
If reselling is your trade or business and net earnings from self-employment are $400 or more, yes. The IRS calculates those earnings as 92.35% of net profit. The tool in this cluster shows the amount using your numbers.
Does the IRS see my sales if the platform does not send a form?
This page cannot say what the IRS can see. It only repeats the IRS position: income is taxable whether or not a form is sent, and the reporting threshold on forms is separate from what is taxable.
Not tax advice
This page is general information built from the IRS and platform sources listed above. It is not tax, legal or accounting advice and it does not know your situation. Results vary: every figure comes from the assumptions you enter or the labelled example, not from a prediction of what you will earn. Confirm anything that matters with the IRS instructions, your state revenue department or a tax professional. A Canadian version is not covered here.