The 1099-K for US Sellers: What the IRS Actually Requires
Half the reselling advice online still repeats a $600 threshold that was repealed before it ever applied. Here is the current federal rule, sourced line by line to IRS.gov.
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In this guide
- The $600 rule you are worried about
- The federal threshold, in the IRS's words
- A 1099-K is information, not a tax bill
- Selling your own things for less than you paid
- When reselling becomes a business
- If a 1099-K arrives that should not have
- Your state may have a lower threshold
- Your five-step plan
- FAQ: the 1099-K and reselling
The $600 rule you are worried about
You sold a few hundred dollars of clothes on Vinted, Poshmark or Mercari, then read that anything over $600 gets reported to the IRS. That number has been repeated so often it feels like settled law. It is not — and it never governed a single filing season.
Here is the short version, before any of the detail. A federal law passed in 2025 restored the older, much higher reporting threshold, retroactively. The IRS published its FAQs on the change on 23 October 2025, in Fact Sheet 2025-08 (IR-2025-107). Most of the reseller content you will find online was written between 2023 and 2024, when the $600 figure was still scheduled to arrive, and has never been updated.
$20,000
Federal 1099-K threshold
A platform must file only when payments exceed this AND transactions exceed 200
200
Transactions, also required
Both limits have to be passed — the dollar figure alone is not enough
$0
Tax on a personal item sold at a loss
No gain means no taxable income — the IRS gives a specific way to show it on Schedule 1
This guide covers US federal rules only, and every figure links to the IRS page it comes from. If something here matters to a decision you are about to make, click through and read the source yourself — that is the whole point of writing it this way.
What this guide is, and is not
General information about US federal tax rules for people selling second-hand items online, current as of 31 July 2026. It is not tax advice, and it cannot account for your circumstances. Anything beyond a simple closet clear-out — reselling as a habit, several income streams, high-value or inherited pieces, a form you believe is wrong — belongs with IRS.gov or a qualified tax professional.
Selling from the UK or Ireland, not the US?
You are in the wrong guide, and the difference is not cosmetic — these are three separate tax systems with different authorities, forms and thresholds. Our Vinted UK tax guide covers HMRC and the £1,000 trading allowance; our Vinted Ireland tax guide covers Revenue, DAC7 and Form 11. Nothing on this page applies to either.
The federal threshold, in the IRS's words
The rule is short enough to quote in full. From the IRS's own announcement of the change:
"third party settlement organizations are not required to file Forms 1099-K unless the gross amount of reportable payment transactions to a payee exceeds $20,000 and the number of transactions exceeds 200."
Read the conjunction carefully, because it is where people go wrong in the other direction. It is and, not or. Both limits have to be passed before a platform is required to file: more than $20,000 in gross payments and more than 200 transactions in the year. Selling $22,000 across 40 transactions does not, on its own, trigger a required filing.
"Third party settlement organization" is the technical name for exactly what you are dealing with — the marketplace or payment app that settles payments to you. Vinted, Poshmark, Mercari, eBay, Depop, PayPal and the rest all sit in that category.
How we got here, since the confusion is the story
The Five-Year Round Trip
2021 — the American Rescue Plan Act lowers it to $600. ARPA changed the reporting threshold to $600 with no transaction minimum, scheduled to take effect for the 2022 tax year. This is the origin of every headline you have read.
2022 and 2023 — the IRS postpones it, twice. In Fact Sheet 2023-27 (November 2023), the IRS confirmed it had "delayed the new $600 Form 1099-K reporting threshold requirement for third party payment organizations for tax year 2023", and that 2023 and prior years would be treated as transition years at the old $20,000 and 200 transactions level.
2024 — a phased step to $5,000. The same fact sheet set out the IRS's plan for "a threshold of $5,000 for 2024 to phase in reporting requirements". Some sellers did receive a Form 1099-K under that interim figure, which is worth knowing if you are looking at an older form and wondering why it exists.
2025 — the One, Big, Beautiful Bill repeals it retroactively. The IRS states that the OBBB "retroactively reinstated the threshold that existed before the American Rescue Plan Act of 2021", putting it back at $20,000 and more than 200 transactions.
Why so much content is still wrong
Between 2021 and 2024 there was a genuine, imminent $600 threshold to write about, and thousands of articles were written about it. It was postponed, then partially replaced, then repealed — and almost none of that content was revised. Search results have a long memory. When you read anything about 1099-K thresholds, check the publication date before you believe the number, and check it against IRS.gov.
A 1099-K is information, not a tax bill
This is the sentence to hold on to, and the IRS says it more plainly than any guide could. Form 1099-K is described as "an information return used to report payments you received during the year" from payment cards and third party settlement organizations. And on whether the threshold changes what you owe, the IRS's general FAQ answers directly:
"the Form 1099-K reporting threshold doesn't affect whether payments are taxable or whether a tax return must be filed."
Two completely separate questions live here, and collapsing them is the source of most of the anxiety:
- Will a platform send a form about me? A mechanical test: more than $20,000 and more than 200 transactions federally, subject to the exceptions below.
- Do I owe tax? An entirely different question, about the nature of what you did — which is what the rest of this guide covers.
The corollary is worth stating too, because it cuts the other way. The IRS is equally clear that "all income, no matter the amount, is taxable unless the tax law says it isn't – even if you don't get a Form 1099-K." Not receiving a form is not an exemption. If you ran a genuine reselling business and cleared $8,000 in profit, that income is reportable whether or not anything arrived in the mail.
Both directions of the same mistake
"I got a 1099-K, so I owe tax" and "I didn't get a 1099-K, so I owe nothing" are the same error wearing different clothes. The form reports payments. Your return reports income. They are related, but one does not determine the other.
Selling your own things for less than you paid
For most people reading this, this is the section that ends the worry. If you bought a coat for $120, wore it for three years and sold it for $35, there is no gain. There is nothing to tax, because a tax on income needs income to tax.
What is genuinely useful — and what almost no reseller article bothers to explain — is that the IRS has published a specific mechanism for showing this on a return when a Form 1099-K reported the sale. From the IRS's FAQs on what to do if you receive a Form 1099-K:
- Report your proceeds — the Form 1099-K amount — on Schedule 1 (Form 1040), Part I, line 8z, "Other Income", described as "Form 1099-K Personal Item Sold at a Loss".
- Report your costs, up to but not more than the proceeds amount, on Part II, line 24z, "Other Adjustments", with the same description.
The IRS's own worked example is a refrigerator bought for $1,000 and sold for $700: $700 goes on each line, and the net effect on adjusted gross income is $0. The IRS also offers an alternative route, reporting the transaction on Form 8949.
One limit worth knowing
The offset is capped at the proceeds. You report your cost up to but not more than what the item sold for — you cannot use the $85 you "lost" on that coat to reduce other income. A loss on a personal item is not deductible. The mechanism exists to stop a reported payment inflating your income, not to generate a deduction.
What about a gain?
The mirror case is simpler and the IRS is direct about it: if you made a profit on the sale of a personal item, that profit is taxable, reported on Form 8949 and Schedule D. The IRS's example is concert tickets bought for $500 and resold for $900 — a $400 taxable gain.
For clothing this is rare, but it is not impossible: a limited-run sneaker, a vintage designer bag, a piece that has genuinely appreciated. If that describes what you are selling, that is exactly the point to bring to a tax professional rather than a blog — including how to establish what you originally paid.
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What to keep, starting today
The most valuable line on that list is what you originally paid. It is the evidence behind "I sold it for less than it cost me". Without it, you are relying on memory, and memory is not a record.
When reselling becomes a business
At some point, buying to resell stops being a closet clear-out. There is no transaction count that flips the switch — the IRS tests the character of the activity, using factors drawn from section 183 of the tax code.
The IRS's guidance on hobby activities lists nine:
| # | Factor the IRS considers |
|---|---|
| 1 | Whether the activity is carried out in a businesslike manner and the taxpayer maintains complete and accurate books and records |
| 2 | Whether the time and effort the taxpayer puts into the activity show they intend to make it profitable |
| 3 | Whether they depend on income from the activity for their livelihood |
| 4 | Whether any losses are due to circumstances beyond the taxpayer's control or are normal for the startup phase of their type of business |
| 5 | Whether they change methods of operation to improve profitability |
| 6 | Whether the taxpayer and their advisors have the knowledge needed to carry out the activity as a successful business |
| 7 | Whether the taxpayer was successful in making a profit in similar activities in the past |
| 8 | Whether the activity makes a profit in some years and how much profit it makes |
| 9 | Whether the taxpayer can expect to make a future profit from the appreciation of the assets used in the activity |
No single factor decides it. It is the whole picture, which is the opposite of a threshold.
- Inventory sourced specifically to resell
- Regular sourcing trips, weekly listings
- Items never owned or used personally
- Bought cheap, listed straight away
- Books kept because profit is the point
- Items you bought for yourself and wore
- Bursts of activity — a clear-out, a move
- Owned and used for months or years
- Most items sell below what you paid
- The goal is space, not margin
Two American examples
Dana, Ohio. Two kids have outgrown three years of clothes and the basement has to be cleared before winter. Over four months she lists 90 items across Vinted and Poshmark and takes in $1,400. Everything was bought for her own family and used. Nearly every piece sells for a fraction of what it cost. Dana is well under the federal reporting threshold on transactions value, and even if a form arrived, there is no gain anywhere in the activity to tax.
Renee, Georgia. Every Saturday she works estate sales and outlet racks looking for labels that are underpriced, steams and photographs them properly, and lists them on Mercari and Poshmark the same week. She turns over $40,000 in a year across 600 transactions. The factors all point one way: inventory acquired to sell, short ownership, high frequency, work done to make items marketable, and profit as the purpose. Renee is running a business, and business income is reportable whether or not a form arrives.
Two things that follow from being a business
If the activity is a trade or business, self-employment tax generally enters the picture: the IRS requires filing where net earnings from self-employment were $400 or more, at a rate of 15.3% (12.4% Social Security, 2.9% Medicare) — see Self-employment tax. And the reverse also matters: where an activity is not carried on for profit, the IRS states that taxpayers "can't use a loss from the activity to offset other income". A hobby cannot generate a deductible loss.
Where exactly your own activity falls between Dana and Renee is not something a blog can tell you. That is a conversation with a tax professional, and it is worth having before you file rather than after.
If a 1099-K arrives that should not have
It happens — a personal reimbursement miscoded as a payment for goods, a duplicate, an amount that includes sales you never made. The IRS has published specific actions to take, and the order matters.
First, go to the issuer, not the IRS. The IRS says to "contact the issuer of the Form 1099-K immediately. The issuer's name appears in the upper left corner on the form along with their phone number." Ask for a corrected Form 1099-K showing a zero amount, and keep a copy of all correspondence with the issuer for your records.
Second, do not let it delay your return. If a corrected form has not arrived in time, the IRS guidance is to file anyway, with offsetting entries:
- Schedule 1 (Form 1040), Part I, line 8z — described as "Form 1099-K Received in Error".
- Part II, line 24z — same amount, same description.
The net effect on adjusted gross income is $0. It is the same shape as the personal-item-at-a-loss mechanism: the reported amount is acknowledged and then neutralised, so nothing is left hanging between what the platform reported and what your return shows.
Keep the paper trail
Whatever route you take, keep the original form, the corrected one if it arrives, and your correspondence with the issuer. If a question comes back later, that folder is the entire answer. If the amount is large or the issuer will not engage, this is a point to bring a tax professional in rather than improvising.
Your state may have a lower threshold
The $20,000 and 200 transactions figure is the federal rule. It is not the only rule that can produce a form in your mailbox, and the IRS says so itself in its general FAQ:
"Your state may have a lower reporting threshold for TPSOs, which could result in you receiving a Form 1099-K, even if the total gross payments and transactions did not exceed the federal reporting threshold."
Several states do set their own, lower figures. We are deliberately not listing numbers here: state thresholds have changed repeatedly in recent years, they are set by each state's own revenue department, and a stale figure in a tax article is exactly the problem this guide exists to correct. Check your own state's department of revenue for the current position, or ask a tax professional in your state.
Two other reasons a form can arrive below the federal threshold, both from the same IRS FAQ:
- A platform can choose to send one anyway. The IRS notes that a TPSO "may still send a Form 1099-K for payments for goods or services for amounts lower than the thresholds."
- Backup withholding overrides the threshold. Where a platform performed backup withholding under IRC 3406(a) for a payee during the prior year, it must file a Form 1099-K with the IRS regardless of the amount. Backup withholding can be triggered by, among other things, a taxpayer identification number not being provided to the platform.
None of these change the underlying point. A form below the threshold is still an information return, and it still does not decide whether you owe anything.
Your five-step plan
From Anxiety to a Clear Position
Step 1 — Name the activity honestly. Clearing your own closet, or buying to resell? Everything else follows from that answer.
Step 2 — Check the threshold at the source. More than $20,000 and more than 200 transactions, federally. Read it on IRS.gov, not in an article that may predate the 2025 repeal.
Step 3 — Keep the purchase evidence. Order confirmations, bank lines, receipt photos. This is what supports "I sold it for less than I paid".
Step 4 — Sort losses from gains before filing season. Personal items sold at a loss and personal items sold at a gain go to different places on a return. Sorting them in January is a five-minute job; sorting them in April is archaeology.
Step 5 — Get help when it stops being obvious. Steady reselling, an appreciated item, a form you believe is wrong, a state with its own threshold. An hour with a tax professional is cheap compared with getting any of those wrong.
The bottom line
The overwhelming majority of people selling used clothes on Vinted, Poshmark, Mercari or eBay are clearing their own possessions, usually below what they paid, and owe nothing on those sales. The $600 threshold that drove years of anxious headlines was repealed before it ever applied. What actually changes the answer is not how many items you sell — it is whether the activity is a business.
If you are selling into the UK or Irish markets as well, the rules there are different again: our UK guide covers HMRC and our Ireland guide covers Revenue. Mixing the three systems is the single most common mistake in English-language reselling content.
And if the reason you are reading about tax is that your sales have picked up, three companion guides cover the rest of selling here: how Vinted works for US sellers, a side-by-side comparison of the US platforms, and the scams that target US resellers platform by platform.
One last time, because it matters
This article is general information, not tax advice. It reports what the IRS has published, with links so you can verify every figure. It cannot tell you what to put on your return, and nothing in it should be treated as a recommendation for your individual situation. For that, go to IRS.gov or consult a qualified tax professional.
FAQ: The 1099-K and Reselling in the US
Sources
Every figure and quotation in this guide comes from one of these IRS pages, consulted on 31 July 2026:
- IRS — IRS issues FAQs on Form 1099-K threshold under the One, Big, Beautiful Bill; dollar limit reverts to $20,000 — Fact Sheet 2025-08 / IR-2025-107, 23 October 2025 (the $20,000 / 200 transactions threshold and the retroactive reinstatement)
- IRS — Form 1099-K FAQs: General information (information return; threshold does not affect taxability; below-threshold forms; backup withholding; state thresholds)
- IRS — Understanding your Form 1099-K and What to do with Form 1099-K
- IRS — Form 1099-K FAQs: What to do if you receive a Form 1099-K (Schedule 1 lines 8z / 24z for a personal item sold at a loss; Form 8949 and Schedule D for a gain)
- IRS — Actions to take if a Form 1099-K is received in error or with incorrect information
- IRS — Here's what taxpayers need to know about paying taxes on their hobby activities (the nine factors) and Know the difference between a hobby and a business
- IRS — Self-employment tax (Social Security and Medicare taxes) (the $400 filing point and the 15.3% rate)
- IRS — IRS announces 2023 Form 1099-K reporting threshold delay; plans for a $5,000 threshold in 2024 — Fact Sheet 2023-27 (the delay chronology)
Tax rules and figures change, and state rules are set separately by each state. Check the current version of any source before you rely on it.
FAQ: The 1099-K and Reselling in the US
Further Reading
Vinted USA:
Vinted opened in the US in January 2026 with no seller fees. How listing, shipping and payouts work, and what changes if you come from Poshmark.
Lire l'article
Reselling Scams in the US:
Off-platform payment, empty-box returns, the address switch. The scams that target sellers on Poshmark, Mercari, Depop and eBay — and where to report them.
Lire l'article
Where to Sell Clothes Online in the US:
Seller fees, buyer fees, shipping and audience compared on a $40 item, with every figure taken from each platform's own fee page in July 2026.
Lire l'article
Vinted UK Tax 2026:
DAC7, the £1,000 trading allowance, CGT — the plain-English breakdown of every UK tax threshold that matters for Vinted sellers in 2026.
Lire l'article
Vinted Tax in Ireland:
Revenue is not HMRC. The DAC7 threshold, what the €5,000 and €30,000 figures really mean, and when clearing your wardrobe becomes taxable in Ireland.
Lire l'article
How to take Vinted photos
White background, natural light, AI mannequin or worn shot: all 2026 techniques for Vinted photos that sell fast. Before/after examples included.
Lire l'article
Best AI model apps for Vinted:
Comparing the best AI model apps for Vinted in 2026. We assess rendering quality, pricing, privacy, and which app matches your seller profile.
Lire l'article⚖️ Tax Information — Please Read
Independence: VendyStudio is an independent service. We are not affiliated with Vinted, Beebs, Depop or any other resale platform mentioned in this article.
Results: Performance figures mentioned are based on user feedback and internal research (January 2026). Results may vary.
Responsibility: Always check your platform's terms and conditions before publishing. You are responsible for the content you publish.
Moderation: Platform moderation systems are opaque and may change. VendyStudio cannot guarantee that your photos will be accepted by moderators.
This article is general information about US federal tax rules, not tax advice. It reflects IRS guidance published as of 31 July 2026, with a direct link to every source so you can verify each figure yourself. Tax law changes, state rules differ, and your own position depends on facts we know nothing about. For anything beyond a straightforward closet clear-out — regular reselling, several income streams, inherited or high-value items, or a form you believe is wrong — go to IRS.gov or speak to a qualified tax professional. Vendy Studio is not a tax adviser and cannot be held responsible for decisions made on the basis of this article.
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