The Reseller's 1099-K Guide (2026): Why You Don't Owe Tax on the Whole Number
General info as of mid-2026, not tax advice. Rules change; a resale-savvy tax pro is worth it.
Every January, reseller groups fill with the same panicked post: "I got a 1099-K for $14,000 — do I owe taxes on all of it?!" No. Deep breath. Here's how it actually works.
The one sentence to remember
A 1099-K reports your gross sales. You owe tax on your profit — gross minus what the items cost you, minus fees, shipping, supplies, mileage, and the rest. For most resellers that gap is 60–85% of the gross number.
2026 thresholds
| Level | Threshold |
|---|---|
| Federal | $20,000 AND more than 200 transactions (reverted under 2025's tax law) |
| Several states (MD, VA, MA, VT, DC, IL and others) | Much lower — some still $600 |
Two traps: a state form can arrive even when no federal one does, and no form ≠ no taxes — profit is taxable from dollar one either way. The form just means the IRS has your gross number, which is exactly why your own records matter.
What subtracts from gross
- Cost of goods — yes, thrift and bin receipts count. Keep them.
- Platform fees (they add up fast — see our fee guide)
- Shipping labels, mailers, boxes, tape
- Mileage to source and meet up: 72.5¢/mile Jan–Jun 2026, 76¢/mile from July 1
- Storage, software, the business share of your phone
The 15-minute fix
Log every haul receipt and every sale as they happen — 15 seconds each — and move ~25% of profit to a savings account named TAXES. That's the whole system. Our Reseller HQ spreadsheet does the math parts automatically (and its Tax Notes tab is this article, always in reach), but honestly: any consistent record beats the January scramble.
Trackers that do this math for you
ThriftMath builds profit trackers for resellers and flippers — one-time prices, no subscriptions.
See the trackers