Is selling personal items on Poshmark considered income?

Generally, if you are selling personal items from your own closet for less than what you originally paid for them, it is not considered taxable profit. But if you are sourcing inventory specifically to flip for a profit, you are running a taxable business.

Does Poshmark send a 1099 form?

Yes, Poshmark will issue a 1099-K form if your gross sales meet or exceed the current IRS reporting thresholds for that tax year. The number on this form represents your gross receipts, not your taxable net profit.

What are good tax write offs for resellers?

In addition to platform fees, resellers can deduct a variety of operational costs. Common tax deductions for resellers include shipping supplies (polymailers, tape, boxes), the cost of goods sold (COGS), mileage for trips to the post office, cross-listing software, equipment like thermal printers, and even home office space used exclusively for the business.

Calculator

How to Deduct Poshmark Shipping Supplies and Fees

Q: Do you have to pay taxes on Poshmark?

Yes. If you are operating your Poshmark closet as a reseller business to make a profit, you are required to report your income and pay taxes on your net profit. However, you only pay taxes on your profit after deducting business expenses, not on your gross receipts.

Q: Are Poshmark selling fees tax-deductible?

Yes, every cent of Poshmark's selling fees is a tax-deductible business expense. You can write off the 20% commission fee on sales over $15, as well as the flat $2.95 fee on sales under $15.

The IRS unfortunately does not accept payment in vintage denim.

If you are treating your Poshmark closet like a legitimate reseller business model, you have to report your income. A common question among beginners is, do you have to pay taxes on Poshmark? The short answer is yes. However, figuring out your Poshmark taxes doesn’t mean handing over a percentage of every single dollar that hits your account.

(A quick caveat: Is selling personal items considered income? Generally, if you are selling items from your own closet for less than you originally paid, it is not taxable profit. But if you are sourcing inventory to flip, you are officially running a business.)

The secret to surviving reseller taxes without weeping into a spreadsheet is accurately tracking your expenses and knowing exactly what are good tax write offs. Every roll of tape, every shipping discount, and every Poshmark fee reduces your overall tax burden.

Here is exactly how to maximize your tax deductions for resellers by writing off your Poshmark fees, shipping supplies, and other business expenses using Schedule C.

Gross receipts are not your payouts (and the Poshmark 1099 trap)

One of the biggest mistakes sellers make is calculating taxes based only on the net cash that actually hits their bank account.

When you file your taxes, you have to report your Gross Receipts—the total amount the buyer paid before any cuts were taken out. If your sales numbers are high enough, you might ask: does Poshmark send 1099 forms to everyone? The platform will issue a Poshmark 1099 if you cross the reporting limits, and the massive number listed in Box 1a will represent these gross receipts.

If you are panicking over that number and need a breakdown of how these platform forms work, read our comprehensive breakdown on what is a 1099k to understand the federal rules.

Just remember: you do not pay taxes on that massive gross number. You use your Poshmark tax form as a starting point, and then you immediately write off your operational expenses against it.

Poshmark takes 20%. You can deduct all of it.

Poshmark’s fee structure is a flat 20% tax on your soul. The good news is that every single cent of it is a deductible business expense.

You can write off the 20% commission fee on all sales of $15 or more, as well as the flat $2.95 fee on sales under $15.

To track this, download your "My Sales Report" from the Poshmark seller dashboard. This CSV file breaks down the exact platform fee taken from every transaction. Alternatively, you can use our free Poshmark fee calculator to project your exact net margins before you even list an item.

(I highly recommend doing this before you accidentally accept a $12 offer on a heavy coat and realize your profit margin was exactly forty cents.)

Those $4.97 shipping discounts are a business expense

Unlike eBay or Mercari, Poshmark standardizes the shipping label process for a flat buyer rate. But if you are trying to move stale inventory during a Closet Clear Out event, you are probably offering active shipping discounts to Likers.

When you drop the buyer's shipping cost to $4.97 or offer temporary free shipping to close a sale, Poshmark deducts the financial difference directly from your earnings. That missing cash isn't just lost revenue—it is a fully deductible business expense that lowers your taxable income.

Write off the mountain of pink polymailers

If your partner trips over a mountain of pink polymailers in the hallway at least twice a day, there is a silver lining: those shipping supplies are legitimate tax write-offs.

Keep your digital receipts for packaging materials, including:

Corrugated boxes and polymailers
Tissue paper, packing peanuts, and bubble wrap
Packing tape and thermal printer labels
Printer ink and decorative "thank you" stickers

The Catch: You can only deduct the percentage of supplies actually used for your business. If you buy a bulk pack of tissue paper and use half of it to wrap holiday gifts for your family, you can only legally deduct 50% of the total receipt cost.

COGS: The money you spent at the thrift store

You do not pay income tax on the money you spent to acquire your inventory. This is your Cost of Goods Sold (COGS).

Whether you are buying wholesale for a boutique or standing elbow-deep in the bins at the Goodwill Outlet, those acquisition costs protect your margins.

Here is the math: You pay $10 for a designer dress at the thrift store. You sell it on Poshmark for $40. Your taxable profit is not $40. It is $40 minus your $10 COGS, minus Poshmark’s $8 fee, minus the cost of the polymailer you shipped it in.

Note: Under standard IRS rules, you can only deduct the cost of an item in the exact tax year that it actually sells. This means your unlisted "death pile" of inventory sitting in plastic bins doesn't count as a deduction yet. Go list it!

Other operational costs you should be claiming

Beyond boxes and transaction fees, there are a few other hidden tax deductions for resellers you should be tracking:

Software subscriptions: Cross-listing utilities are 100% deductible. If you use a tool like Voolist to save time by automatically cross-posting your Poshmark inventory to eBay and Depop, that monthly subscription fee is a legitimate business write-off.
Business Mileage: Driving to the post office, local thrift stores, or estate sales counts. Keep a clean mileage log; the IRS allows you to deduct a standard set rate per business mile driven.
Home Office Deduction: If you have a dedicated room or calculated square footage in your home used exclusively for your inventory storage and packing station, you can write off a proportional percentage of your rent and utilities.
Equipment Assets: Ring lights, backdrops, mannequins, thermal label printers, and clothing racks are all deductible business assets.
Cleaning & Prep Supplies: That 24-hour OxiClean soak required to get a stain out of a vintage silk blouse? The OxiClean is deductible. So is your fabric steamer and sweater shaver.

Putting it all on your Schedule C

When tax season arrives, you will file an IRS Form 1040 and attach a Schedule C to report your business profit or loss.

You will input your Gross Receipts in Part I. Then, you will categorize your calculated deductions in Part II. Your Poshmark transaction fees go on Line 10 (Commissions and fees). Your polymailers, labels, and tape go on Line 18 (Office expenses) or Line 22 (Supplies). Your postal runs go on Line 9 (Car and truck expenses).

By diligently tracking your fees and shipping supplies throughout the year, you ensure that more of your hard-earned Poshmark payouts stay exactly where they belong: in your bank account.

Disclaimer: I am a reseller who happens to be very good at math, not a certified CPA. Tax laws can be nuanced. Always consult a licensed tax professional or CPA regarding your specific business structure and financial situation.

Run your numbers through our Poshmark fee calculator to double-check your exact net margins, print that shipping label, and drop your packages at the post office before you accidentally decide to keep that vintage sweater for yourself.