How To Handle Taxes as a Vinted Seller

How To Handle Taxes as a Vinted Seller

by
Taylor Milam-Samuel
Updated 
December 20, 2023
September 14, 2023
Icon check
Reviewed by
Isaiah McCoy, CPA
Tax guide
How To Handle Taxes as a Vinted Seller
by
Taylor Milam-Samuel
Updated 
December 20, 2023
September 14, 2023
Icon check
Reviewed by
Isaiah McCoy, CPA

Whether you already sell on Vinted or want to start, Vinted sellers can expect a solid user experience — and plenty of prospective buyers. 

Founded in Lithuania over 15 years ago, Vinted has become a go-to secondhand marketplace for European buyers and sellers. But Americans are getting on board and scoring unique items that aren’t always available in the states. And as a seller, you likely have pieces to sell that aren’t available in other parts of the world. 

The app is a seller-friendly platform that won’t charge you fees as a seller. Instead, buyers pay a fixed fee per transaction, meaning you’ll get to keep more of your profit. But as a seller, you might still have to pay taxes on your earnings — even if you’re only using Vinted as a side hustle.

Here’s everything you need to know about taxes as a Vinted seller.

Contents

Do you have to pay taxes on your Vinted sales?

If you earn more than $400 in profit, you should assume that you’ll have to deal with taxes. But if you made $50 for selling one skirt? You won’t owe anything. 

Your earnings — not whether or not you consider your sales a business or hobby — determine your tax obligations.

Hobby income vs. business income

Whether you consider your Vinted sales a fun hobby or a serious business doesn’t always matter when it comes to taxes. The IRS has specific rules about what makes something a hobby or a business. (TL;DR: If you are trying to generate a profit, it’s usually a business, even if you only do it part-time.) Either way, though, you have to pay taxes on your earnings. 

But there are two significant tax differences between a hobby and a business. As a hobbyist:

  1. You can’t claim tax deductions 
  2. You also don’t have to pay self-employment tax, which is an extra 15.3%. (You win some, you lose some)

What if selling on Vinted isn’t a business or a hobby?

A third category of Vinted seller is the garage sale host. If you’re selling items through a one-time “virtual garage sale” to get rid of a few things, you probably don’t need to report your earnings for tax purposes. 

Let’s imagine that you’re embarking on a big cross-country move. Before you start packing, you decide to declutter your closet and get rid of unwanted items. You find a pile of clothes you no longer wear and post them as a bundle on Vinted. You make a few sales and treat your friends to a goodbye dinner with your earnings.

After accounting for how much you spent on the clothes when you first bought them, you probably didn’t make a profit, per se. But it’s still a win-win for your closet and bank account — and since it was a one-time closet cleanout, you won’t be on the hook for taxes. 

Do Vinted sellers have to pay sales tax?

Vinted handles sales tax on behalf of sellers, and you don’t have to pay a cent. One less thing to worry about!

The sales tax requirements do vary by state. Luckily, Vinted has a handy list of the states in which it collects sales tax.

Long story short — as a Vinted seller, you don’t need to worry about sales tax and how it works in each state. Vinted has got it covered and handles all of it on your behalf. 

What taxes do you have to pay on your Vinted sales?

Remember the hobbyist vs. business owner distinction? Here’s where it comes into play.

You must pay income tax and self-employment tax if you’re a business owner running your Vinted store for a profit. But if you sell on Vinted as a hobby, you’re only on the hook for income tax. Here’s a rundown of each.

Income tax

Once you pass the threshold of $400 in sales on Vinted, you’re responsible for paying income tax. Since you’re an independent contractor (which is a fancy way of saying that you’re not a W-2 employee), the taxes are not automatically deducted from your paycheck. Instead, you’ll have to handle them yourself.

The tax earnings threshold might seem low, but there’s a reason — the IRS is trying to keep up with the times and collect taxes from online businesses. 

As H. Nicole Rosen, EA at Boundless Advisors, explained, “You need to understand that the IRS is constantly changing tax rules, and they are trying to close the tax gap…the tax gap is the difference between the taxes the IRS actually collects and the taxes the IRS believes they should collect.” 

Figuring out how much you owe can feel like a mystery, but Keeper’s free income tax calculator can help you estimate your Vinted taxes. 

Self-employment tax

Sellers on online marketplaces like Vinted are considered self-employed people. Working for yourself comes with plenty of perks. But it also comes with some significant responsibilities, like paying self-employment tax. 

The name of the tax is misleading, though, since it’s actually the FICA (Federal Insurance Contributions Act) tax, which funds Social Security and Medicare. All workers pay it, including W-2 employees. But W-2 employees split the 15.3% tax rate with their employer — the employer pays 7.65%, and the employee pays 7.65%. It’s a sweet deal if you can get it.

But as a Vinted seller who runs a business, you’re responsible for paying the entire rate. (You might pay less thanks to write-offs, though — more on that in a second!)

There’s one exception, though — if you’re a hobbyist, you don’t have to pay the FICA tax. It’s a nice perk for sellers who only occasionally use the app and classify themselves as “hobbyists” per the IRS guidelines. 

How to lower your Vinted taxes with write-offs

You’ve probably heard of write-offs, but you might not know what they actually are. Basically, you can subtract the cost of doing business (e.g. supplies, shipping, transportation) from your total profit. The resulting, lower number is what you’re actually taxed on.

Let’s say you earned $10,000 from Vinted this year. However, you also spent nearly $5,000 sourcing clothes, paying for professional photography, and purchasing fancy shipping labels. After writing off your qualified business expenses, your profit for the year is actually $5,000, not $10,000 — you didn’t get to enjoy the whole $10,000! Thus, when it’s time to calculate your taxes, you’ll base the calculations on $5,000. 

As a small business owner, write-offs can have a big impact on how much you owe. And as a Vinted seller, you can utilize tons of potential write-offs for your business, so tracking how much you spend throughout the year is essential. Here are some you should consider: 

  • 👕 Inventory: You know that cool vintage dress you sourced from across the country? The cost of buying, cleaning, and repairing it is tax-deductible. The same is true for every other item of inventory, too 
  • 📱Phone bill: Since Vinted is an app, you probably use your phone to run your business — posting items, messaging buyers and updating listings. Because of that, you can write off your cell phone bill. Here’s what you need to know about deducting your cell phone bill 
  • 📦 Shipping costs: If you pay for shipping labels, packaging and other expenses associated with shipping, then you can count them as write-offs. Yep, it’s true — the neon green mailers you picked are tax-deductible 
  • 🚗 Transportation costs: Whether you drive to local thrift stores to find treasures to sell on Vinted or make weekly trips to the post office to mail your sales, you can write off your transportation expenses. You’ll just need to calculate the business-use percentage
  • 🏢 Office space: Whether you use a home office or a professional coworking space, you can write off the expense of a dedicated workspace — where you store inventory counts too
  • 📸 Photography expenses: If you buy equipment, props, or editing apps to create high-quality photographs for your listing, you can write off the costs. Or maybe you work with a professional photographer to really stand out. That’s also a write-off 

Even if Vinted is a side hustle, costs like these add up. It makes sense to track them to save on your taxes. But it’s boring and time-consuming to keep updating spreadsheets and organizing receipts

Keeper can take this hassle off your hands. This smart tax app is an easy way track your Vinted expenses — and file taxes to claim your savings. Keeper links to your accounts, so you can see transactions as they come in and quickly mark them as write-offs. As you use it, the app will learn your buying habits and automatically write off what you spend on your Vinted shop.

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How to file taxes as a Vinted seller

As a Vinted seller, you can expect to receive a 1099-K form from the company. Once you receive the form, you can file your taxes using Form Schedule C. But let’s take it one step at a time.

How to read your 1099 form 

Your 1099-K form is an official tax document that details how much you earned from a particular company during a tax year. The 1099-K form from Vinted will report how much you earned on that platform in box 1a.

Part of a blank Form 1099-K, which box 1a, for "Gross amount of payment card/third part network transactions," circled in pinkn

Who gets a 1099-K from Vinted?

If you earned over $20,000 on Vinted over one year, the company must send the form by January 31. (But don’t panic if you don’t receive it immediately. It can take a few weeks to arrive.) 

The threshold for receiving a 1099-K will be much lower — $600 — for the 2023 tax year. Because, as Rosen explained, the IRS is trying to close the tax gap and collect taxes from businesses earning money online. 

Can you owe taxes if you don’t get a 1099-K?

Yes. This is where it gets slightly confusing — even if you don’t receive the form, you might still owe taxes. Remember, the threshold for income tax is $400 (which means you won’t receive a 1099 form if that’s all you earned). But even if the form gets lost in the mail or sent to the wrong address, you still owe taxes, and you can probably calculate your earnings through your sales transaction history on the app. 

“If you’re in the business of [selling items online], you should be claiming the income whether or not you get a tax document,” said Rosen. “The number one thing [sellers] need to consider about their taxes is records…You need to think about how you are going to track [your] costs.”

Keeper can help you track your expenses right on your phone. Then, when you’re ready to file, you can do so right on the app. Plus, Keeper’s team of tax assistants will be standing by to answer any questions that might come up.

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How to fill out Schedule C 

Once you’re ready to file your taxes, you’ll use Form Schedule C, which is a two-part form used to report self-employment income on a personal return.

The first part of Schedule C asks for your “gross sales,” which is how much you earned in online sales before deductions. Part II is all about deductions, so you’ll record those there.

How many Schedule Cs do you need?

You'll fill out one Schedule C for each self-employed job you do. "Online seller" is a single job. So if you sold through other online platforms in addition to Vinted — like eBay or Facebook Marketplace — you'll report your income and deductions from all those platforms on a single form. 

However, if you do any other freelance work in addition to selling online, you'll need a separate Schedule C for each type of work. For example, pretend you:

  • Sell clothes on Vinted
  • Do graphic design through Upwork
  • Play in a wedding band

You'll need to fill out three Schedule Cs.

Need help with the form? Keeper has a handy guide for all things Schedule C.

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Do Vinted sellers have to pay quarterly taxes?

As an online seller, you must pay quarterly taxes if you expect to owe more than $1,000 for the year. Quarterly taxes are estimated tax payments that you make every three months.

If you want to avoid paying penalties (which you definitely do!), then make sure to pay your taxes by the following deadlines each year.

  • April 15
  • June 15
  • September 15
  • January 15

It might sound confusing, but you’ll get the hang of it. Plus, you’ll always know where you stand with the IRS — and you won’t have a big bill at the end of the year.

Want to get an idea of how much you’ll owe? Check out Keeper’s estimated quarterly tax calculator.

As an online seller, tax lingo and earning thresholds can feel overwhelming. But the takeaway is simple — if you make over $400 through sales on Vinted, you must pay taxes. Hobbyists don’t have to worry about self-employment tax, but can’t take any business deductions. Business owners can utilize write-offs but are on the hook for self-employment tax. So what do both types of sellers have in common? Income tax.

Taylor Milam-Samuel

Taylor Milam-Samuel

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Taylor Milam-Samuel is a personal finance writer and credentialed educator who is fascinated by how people earn, save and spend their money. Her work has been featured on Insider, Discover, Forbes Advisor, Policygenius, and more. When she's not demystifying financial terms and conditions for consumers, she can be found teaching.

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At Keeper, we’re on a mission to help people overcome the complexity of taxes. We’ve provided this information for educational purposes, and it does not constitute tax, legal, or accounting advice. If you would like a tax expert to clarify it for you, feel free to sign up for Keeper. You may also email support@keepertax.com with your questions.