Selling online and Form 1099-K: when it's taxable and what the IRS sees
Form 1099-K is how payment apps and online marketplaces tell the IRS what went through your account. The threshold for those forms has moved several times in recent years, and a lot of people received one for selling a couch or splitting a dinner bill.
Two things haven't changed: getting a 1099-K doesn't make money taxable, and not getting one doesn't make it tax-free. What decides it is what you sold, what it cost you, and whether you were in business.
Who gets a 1099-K
The form reports payments you received for goods or services from two kinds of payer:
- Payment apps and online marketplaces (third party settlement organizations). The One, Big, Beautiful Bill retroactively restored the threshold in effect before the American Rescue Plan Act of 2021: they only have to file when gross payments to you exceed $20,000 and you have more than 200 transactions. Your state may set a lower threshold, so you can still get one below it.
- Card payments. If you accept credit, debit or gift card payments, even $0.01 of them is reportable.
Payments from friends and family for gifts or shared costs shouldn't be on a 1099-K at all. If one shows up on yours, use your records to work out which payments were personal.
Selling your own things
Most used belongings sell for less than you paid, and a loss on a personal item isn't deductible, so there is nothing to tax. The IRS's own example: a set of concert tickets bought for $250 and sold for $200 is a $50 loss, which isn't taxable income.
If you received a 1099-K that includes a sale like that, report it so your return matches the form. For a personal item sold at a loss, the IRS shows the sale entered on Schedule 1 so that it nets to zero. For a personal item sold at a gain, such as tickets bought for $250 and sold for $800, the gain is reported on Form 8949 and Schedule D.
Either way, the number that decides it is what you originally paid, which is why the receipt matters years later.
Hobby or business?
If you're buying things to resell, making things to sell, or selling regularly to make a profit, you're likely in business. Business income and expenses go on Schedule C, and your costs, such as inventory, materials, platform fees and shipping, reduce the profit you pay tax on. See Schedule C receipt requirements.
If it's a hobby, with no intention of making a profit, the income still has to be reported, on Schedule 1 (Form 1040), line 8, and you don't get the business deductions a Schedule C allows.
Records to keep
- What you paid for anything you resell or might sell: receipts or order confirmations.
- Costs of selling: platform and payment fees, shipping and packaging.
- Platform statements showing your sales and payouts.
- Business and personal kept apart. The IRS suggests keeping business and personal transactions separate to make it easier to work out what tax is owed.
Keep records for at least 3 years from filing, and longer in the situations covered in how long to keep receipts for the IRS.
Sources
Common questions
When will I get a Form 1099-K?
From a payment app or online marketplace when your gross payments for goods or services exceed $20,000 and you have more than 200 transactions in the year. Payments you take by credit, debit or gift card are reported at any amount. Some states set lower thresholds, so you may get one below the federal limit.
Do I pay tax on personal items I sold online?
Not if you sold them for less than you paid, which is usual for used belongings: a loss on a personal item isn't deductible, and there's no gain to tax. A personal item sold for more than you paid produces a gain, which is reported on Form 8949 and Schedule D.
What if I got a 1099-K for things I sold at a loss?
Report it so the numbers match, and show that there was no gain. The IRS's example for a personal item sold at a loss has the sale reported on Schedule 1 so it nets to zero. Your records of what you originally paid are what support that.
Do I report income that wasn't on a 1099-K?
Yes. The IRS says the 1099-K threshold doesn't affect whether payments are taxable. All income, no matter the amount, is taxable unless the law says it isn't, even if you don't get a Form 1099-K.
Every figure on this page is checked against the IRS's own guidance and linked in the sources above. Last checked . Thresholds change each tax year, so if you are reading this well after that date, confirm the current figures before you rely on them. Terms.
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