How To Pay Taxes on Poshmark Sales in 2026

From vintage wedding dresses to hand-woven dog beds, sellers offering a variety of products use Poshmark to set up shop. For new sellers, however, tax season can come with a lot of questions. Do you have to pay taxes on your online sales? And if so, how much will you owe? What if you don't sell on Poshmark full-time?

We’ll answer those questions and more, including how to save money on your taxes with write-offs like shipping costs and Poshmark fees.

Do you have to pay taxes on Poshmark sales?

Yes, probably. As a rule, assume you owe taxes if you earned money from Poshmark over the past year. There is one exception, the occasional "virtual garage sale." If you hop on Poshmark now and then to sell clothes that have sat in your closet for years, and you sell them for less than you paid, you are not expected to pay tax on that.

But if you make frequent sales, or you buy items specifically to resell, you are either a business seller or a hobby seller, and that income is taxable. We will get into that distinction below.

What taxes will you pay as a Poshmark seller?

Most Poshmark sellers owe income tax on what they earn, and many also owe self-employment tax. Which ones apply to you depends on whether the IRS treats your Poshmark activity as a business or a hobby.

Self-employment tax

If you have ever worked a regular W-2 job, you may remember FICA taxes coming out of your paycheck. FICA funds Social Security and Medicare. A regular employee pays 7.65% and their employer matches it. When you are self-employed, you are both the employee and the employer, so you cover both halves, which comes to 15.3% total.

That sounds steep, but two things soften it. You only pay it on your profit, not your sales, and you can deduct half of it on your return. Business write-offs, which we cover below, lower it further.

Federal and state income tax

Everyone who earns money pays income tax, employees and sellers alike. How much depends on where you live and how much you make. The federal system is progressive, so your rate rises with your income. States vary: some are progressive, some charge a flat rate, and these eight charge no state income tax at all:

• Alaska

• Florida

• Nevada

• South Dakota

• Tennessee

• Texas

• Washington

• Wyoming

Do you have to pay taxes if Poshmark is your hobby?

Say you sell on Poshmark regularly and earn enough to owe tax, but it is just something you enjoy on the side of a full-time job. Does that count as a business? According to the IRS, it might. Your Poshmark activity leans toward a business if:

• You put significant time into selling, even as a side hustle

• You take steps to make it more profitable

• You rely on the income to support yourself

The IRS weighs several factors, and some are subjective. Here is how the two are taxed differently:

The big catch: a hobby seller reports all their income but cannot deduct any expenses, so they can end up taxed on more than they actually cleared. A business seller deducts expenses and is taxed only on profit. For most active sellers, being treated as a business is the better outcome.

Do Poshmark sellers have to pay sales tax?

No, what a relief! Poshmark collects and pays sales tax for you through a feature called Posh Remit. Under state marketplace facilitator laws, Poshmark calculates, collects, and sends state and local sales tax to the government on your behalf. It is added to the buyer's total, not taken out of your earnings, so as a seller you do not have to think about it.

For reference, buyers in Delaware, Montana, New Hampshire, and Oregon are not charged sales tax, since those states have none at the state level. Alaska has no statewide sales tax either, though some localities add their own.

What tax form does Poshmark send?

Poshmark issues a Form 1099-K, which reports the total payments processed through your account. It sends a matching copy to the IRS.

How to get your Poshmark 1099-K

If you qualify, Poshmark sends your 1099-K in late January or early February. To manage or download it on the website, click your profile picture, go to Account Settings, then Manage Taxpayer Information, and set the toggle to On. You can then download the form under Account Settings, then Tax Documents. On the app, go to Account, then My Seller Tools, then Manage Taxpayer Information.

What if you don't get a 1099-K?

You still report your income. To find your total, pull your sales report. On the website, click your profile picture, go to Order Activity, then My Sales Report, choose a date range, and email yourself the report. On the app, go to Account, then My Seller Tools, then My Sales Report.

Why is the income reported on my 1099-K more than what I earned?

The 1099-K reports gross sales, and doesn't account for fees, refunds, or expenses. For example, Poshmark takes a flat $2.95 on sales under $15, and 20% on sales of $15 or more. You get to deduct that fee!

Meredith's Example

Meredith sold an item on Poshmark for $100. Her 1099-K may report the full $100 as gross income. But Poshmark takes a $20 selling fee, leaving her with $80. She originally paid $30 for the item.

So while her 1099-K reported $100 gross income, Meredith really should be paying taxes on $50 net profit.

In order to avoid overpaying taxes on this inflated income number, you need to separate your gross income from your actual net earnings. To do that, you should gather the following:

1. Platform statements

2. Fees and commission breakdowns

3. Records of refunds and chargebacks

4. Records of business expenses (yes, they're tax write-offs!)

Selling a personal item at a loss

Here is the most common Poshmark tax question. Selling a personal item for less than you paid is not taxable income. If you bought shoes for $50 and sell them for $30, that is a $20 loss, and the $30 is not taxed.

However, that sale can still show up on your 1099-K! When that happens, you can't just leave it off your return. You have to report it and then cancel it out:

• On Schedule 1, Line 8z, enter the amount from the 1099-K and label it "Form 1099-K Personal Item Sold at a Loss."

• On Schedule 1, Line 24z, enter the same amount as an offsetting adjustment with the same label.

The two lines net to zero, so you aren't taxed on money you didn't actually make.

Now while you won't pay taxes on that income, you might try to deduct the loss, but you're out of luck here. A loss on personal items is not deductible! In other words, you can't use that loss to lower tax on other income.

On the flip side, if you sell a personal item for more than you paid, like a rare handbag that went up in value, that gain is taxable and goes on Form 8949.

How much tax will you owe?

As a reselling business, you owe two things on your net profit:

• Self-employment tax of 15.3%, which covers Social Security and Medicare, once your net profit is $400 or more.

• Income tax at your regular rate, based on your total household income.

As a rule of thumb, make sure to set aside 25% to 30% of your profit for taxes. If you expect to owe $1,000 or more for the year, the IRS wants you to pay in four quarterly installments. You can use Keeper's free quarterly tax calculator to estimate how much you'll need to pay.

Poshmark tax write-offs

Because Poshmark income is considered 1099 self-employment income, you can write off ordinary and necessary expenses to reduce your taxable income. Common tax write-offs for online sellers include:

If you need help tracking your tax deductible expenses and filing taxes, try the Keeper app. Keeper automatically scans and categorizes your expenses for tax write-offs so you never miss a deduction.

When write-offs lead to a business loss

Say you spend the year buying up inventory but do not sell much of it before December. Your expenses top your income, and you have a business loss. That stings, but it has a silver lining. Since you are taxed only on profit, a loss means no tax on your Poshmark activity, and if selling is a side hustle, the loss can lower the tax on your day-job income. If your W-2 job pays $50,000 and you have a $2,000 Poshmark loss, you are taxed on $48,000.

How to file your Poshmark taxes

1. Gather your records. Your 1099-K if you got one, your Poshmark sales report, and your own purchase receipts.

2. Sort your sales. Separate resale-for-profit from your own closet items that were sold at a loss.

3. Fill out Schedule C. Enter your Poshmark income and business expenses. Income minus expenses is your net profit.

4. Fill out Schedule SE. Use your net profit to calculate your 15.3% self-employment tax.

5. Report it on Form 1040, along with any W-2 or other income you had.

6. For personal items sold at a loss, use the Schedule 1 Line 8z and 24z method above.

When to file, and quarterly taxes

If you expect to owe $1,000 or more for the year, the IRS wants you to pay in four quarterly installments instead of one lump sum in April. Your quarterly tax payments are due on:

• Quarter 1: April 15

• Quarter 2: June 15

• Quarter 3: September 15

• Quarter 4: January 15

If you will owe less than $1,000, you can simply file by April 15. Here is how quarterly taxes work. Not sure how much to make in estimated payments? Use Keeper's free quarterly tax calculator.

FAQs

Do I owe taxes on Poshmark if I sold everything for less than I paid?

Generally no, because a loss on personal items is not taxable. If you get a 1099-K, report the amount on Schedule 1 Line 8z and cancel it out on Line 24z.

Do I have to pay taxes if Poshmark is just my hobby?

If you earn a profit, yes, it is taxable. The difference is that a hobby seller cannot deduct expenses while a business seller can, so business treatment usually means a lower bill.

Do Poshmark sellers have to collect sales tax?

No. Poshmark collects and remits sales tax for you through Posh Remit, and it is added to the buyer's total.

I did not get a 1099-K. Do I still report my Poshmark income?

Yes. Pull your sales report from Poshmark and report your profit whether or not a form was issued.

Why is my 1099-K higher than what I was paid?

It reports gross sales before Poshmark's commission and includes sales tax. Deduct fees, refunds, and business expenses to get your real profit number to avoid overpaying taxes.