Poshmark Taxes

Navigating Poshmark taxes can feel overwhelming, but it’s essential for anyone earning money through the popular resale platform. Whether you’re selling pre-loved clothes for some extra cash or running a full-fledged Poshmark business, knowing how Poshmark taxes work will help you avoid surprises come tax season. Poshmark taxes cover everything from income tax on your sales, self-employment tax for regular sellers, and the all-important sales tax-which, thankfully, Poshmark handles for you in most states. As the IRS tightens reporting requirements and platforms like Poshmark issue 1099-K forms at ever-lower thresholds, it’s more important than ever to keep good records, understand your tax obligations, and file the right forms. This article dives deep into how Poshmark taxes apply to different types of sellers, what deductions you can claim, and how to make quarterly estimated payments if you’re treating your closet as a business. Whether you’re a weekend declutterer or a power seller, here’s your comprehensive, approachable guide to Poshmark taxes in 2025.

Do You Have to Pay Taxes on Poshmark Sales?

Yes-most Poshmark sellers need to pay taxes on their earnings. The IRS considers all income from online sales, including Poshmark, as taxable, even if you only sell a few items or don’t receive a 1099-K form from the platform. The only exception is if you’re selling personal items at a loss, like offloading a jacket for less than you paid-those transactions usually aren’t taxable, and you can’t deduct the loss either.

Hobby Seller vs. Business Seller: Which Are You?

• Personal/Hobby Seller: If you’re only selling personal items occasionally, you typically report any gains (profit) as capital gains, and losses are not deductible. Use IRS Form 8949 and Schedule D for gains, or Schedule 1 for losses.
• Business Seller: If you’re regularly selling for profit, buying inventory, or treating Poshmark as a side hustle, you’re considered self-employed. You’ll report income and expenses on Schedule C and pay both income and self-employment tax (15.3%).

The IRS looks at factors like frequency, intent, and effort to determine your status. If in doubt, err on the side of caution and report your income.

What About Sales Tax?

Good news: Poshmark handles sales tax for you! Since 2019, Poshmark has collected, calculated, and remitted sales tax on eligible orders thanks to marketplace facilitator laws. The buyer pays sales tax based on their location, and you don’t have to worry about collecting or submitting it yourself. However, in rare cases, you might need to file a sales tax return depending on your state, so double-check your local rules.

What Tax Forms Will You Need?

• Form 1099-K: If you meet the IRS threshold (currently $5,000 in sales for 2024, dropping to $2,500 for 2025, and eventually $600), Poshmark will send you this form, and a copy goes to the IRS. Even if you don’t get a 1099-K, you’re still required to report your income.
• Schedule C: For business sellers to report income and expenses.
• Schedule SE: For calculating self-employment tax if you earn $400+ in net income.
• Form 8949 & Schedule D: For reporting capital gains if you sell personal items at a profit.
• Schedule 1: For reporting losses or hobby income.

Quarterly Estimated Taxes

If you’re running your Poshmark as a business, you’ll likely need to make quarterly estimated tax payments to avoid penalties. The deadlines for 2025 are April 15, June 16, September 15, and January 15, 2026. Use Form 1040-ES to calculate and pay your estimates.

Deductions and Write-Offs

Business sellers can deduct expenses like shipping supplies, inventory costs, Poshmark fees, and even a portion of your home office if you qualify. Hobby sellers, unfortunately, can’t deduct expenses-only business sellers get this perk.

Record-Keeping Tips

• Track every sale, expense, and fee-Poshmark’s sales report can help.
• Keep receipts for inventory, shipping, and supplies.
• Save your 1099-K and any other forms you receive.

What Happens If You Don’t Report?

Failing to report your Poshmark income can lead to IRS penalties, interest, and a big headache. Even small amounts should be declared to stay compliant.

FAQs

Do I have to pay taxes if I only sell a few items on Poshmark?
If you sell personal items at a loss, you generally don’t owe taxes, but if you sell at a profit, you must report it.

Does Poshmark send a 1099-K to all sellers?
No, only if you meet the IRS threshold for total sales, but you must report your income even if you don’t receive a 1099-K.

Can I deduct shipping and Poshmark fees on my taxes?
Yes, if you’re a business seller (not a hobbyist), you can deduct ordinary and necessary expenses like shipping and Poshmark fees.

Do I need to worry about sales tax as a Poshmark seller?
Usually not-Poshmark collects and remits sales tax for you in most states.

With this guide, you’re ready to tackle Poshmark taxes confidently-so you can focus on what you do best: finding great deals, making sales, and growing your side hustle!