United States · Resellers · Worked examples
Reseller taxes at $5,000, $18,000 and $40,000 of profit.
Three labelled scenarios showing how the 2026 federal tax estimate changes with net profit. They are assumptions for learning, not typical results.
For a single filer with no other income and no state tax, the model estimates 14.1% of profit at $5,000, 14.5% at $18,000 and 19.8% at $40,000. The percentage rises because self-employment tax applies from the first dollar while income tax only starts after the standard deduction. These are examples of the arithmetic, not forecasts of what any reseller earns.
The scenarios
Each scenario is a net profit after platform fees, cost of goods, shipping and other costs. We chose three round numbers to show the shape of the tax curve. They do not say that anyone earns these amounts or how many hours or sales it takes. Assumptions: tax year 2026, single filer, standard deduction ($16,100), no other income, no credits, and the same engine as the 1099 tax set-aside calculator.
| Net profit | SE tax | Federal income tax | Total | Set-aside % | Take-home |
|---|---|---|---|---|---|
| $5,000 | $706.48 | $0.00 | $706.48 | 14.1% | $4,293.52 |
| $18,000 | $2,543.32 | $62.83 | $2,606.15 | 14.5% | $15,393.85 |
| $40,000 | $5,651.82 | $2,280.89 | $7,932.71 | 19.8% | $32,067.29 |
The same scenarios with a 5% flat state tax (assumption)
| Net profit | State tax at 5% | Total | Set-aside % | Take-home |
|---|---|---|---|---|
| $5,000 | $250.00 | $956.48 | 19.1% | $4,043.52 |
| $18,000 | $900.00 | $3,506.15 | 19.5% | $14,493.85 |
| $40,000 | $2,000.00 | $9,932.71 | 24.8% | $30,067.29 |
How to read the pattern
- Self-employment tax starts first. At $5,000 of profit the whole bill is SE tax, about 14.1% (15.3% of 92.35%). There is no federal income tax because profit less half of SE tax is below the standard deduction.
- Income tax arrives next. At $18,000 profit exceeds the standard deduction by a little, so a small amount of 10% bracket tax appears.
- The percentage keeps climbing. At $40,000 the 12% bracket is involved and the set-aside is about a fifth of profit.
- Profit is not sales. $40,000 of profit usually needs a far higher sales total. Use the calculator to see how fees and costs change it.
Where the arithmetic comes from
For $18,000: SE earnings = $18,000 × 92.35% = $16,623.00; Social Security 12.4% plus Medicare 2.9% gives $2,543.32; half of that, $1,271.66, and the $16,100 standard deduction come off profit before the 2026 brackets apply. Total is $2,606.15. Amounts come from IRS Schedule SE, Topic 751 and Revenue Procedure 2025-32.
What this page does not cover
- How much profit is realistic, how many hours it takes, or what a typical reseller makes. We make no claim about earnings.
- Other income, spouse income, credits, the QBI deduction, itemizing or state rules.
- Loss years and hobby status.
Sources (retrieved October 2026)
- IRS Schedule SE (Form 1040) instructions
- IRS Topic no. 751, Social Security and Medicare withholding rates
- IRS Rev. Proc. 2025-32 (2026 brackets and standard deduction)
- IRS Publication 334, Tax Guide for Small Business
Cite this page: TNAADO Tools, "Reseller Tax Set-Aside Examples," tools.tnaado.ca/calculators/business/reseller-tax-calculator/reseller-tax-set-aside-examples/, checked October 19, 2026.
Frequently asked questions
How much tax does a reseller pay on $18,000 of profit?
In this model for 2026, a single filer with no other income and no state tax owes about $2,606.15 (14.5% of profit), mostly self-employment tax. This is an arithmetic example, not a forecast, and your own numbers will differ.
Why is the percentage higher at $40,000 than $5,000?
Self-employment tax is roughly flat in percentage terms, while federal income tax is zero until profit passes the standard deduction and then climbs through brackets.
Are these typical reseller profits?
No. They are round numbers chosen to illustrate the calculation. We do not publish income statistics and cannot say what resellers earn.
Do these figures include state tax?
The first table does not. The second table adds an assumed flat 5% to show the effect; use your own state rate in the calculator.
Can I change the assumptions?
Yes, in the reseller tax calculator and the monthly planner.
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.