UPDATE: 1099-K forms, $600 threshold POSTPONED AGAIN for 2023

Name: UPDATE: 1099-K forms, $600 threshold POSTPONED AGAIN for 2023
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11/30/23 - 1099-K threshold has been POSTPONED again for 2023. So this means the old threshold ($20K or 200 transactions) is still in effect for 2023. For 2024 there will be a “transitional” threshold of $5K so as to “phase in reporting requirements”. I am not sure what that means for 2025 thresholds. (I am guessing legislators and the IRS will be hashing that out.) I’ll update this listing with the url of my source(s) & resources later but screenshots above are from IRS site 12/27/22. UPDATE. Good news! No 1099-K with a $600 threshold for 2022. It has at least been POSTPONED. Keeping my eye on this, though. Will see what 2023 has in store. Prior comments: We will probably end up receiving a 1099-K from Poshmark if we sell $600 on Poshmark. That means we need to report our Poshmark earnings as taxable income. I need to do more research. Sounds like there are still discussions in Congress….and that there is bi-partisan support for raising the $600 threshold to higher. Sounds like Congress is not wanting this to affect people like us that are selling our used clothing for less than we bought it. Stay tuned…and let me know if you know something more. In the meantime, keep track of your expenses - costs of purchasing clothing you sold, cost of tissue paper, tape, packaging, mileage to/from the post office, etc. If the govt. is going to treat our Poshmark sales as business income, know that you can deduct expenses as if it were a business too! Read some of my comments below.

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78 Comments

jolieespofx Unbelievable...first of all they charge taxes on items they are selling us in the stores (new ) then they charge tax on the used clothes ..this should be illegal since someone already paid tax ..they are collecting twice and now they want to collect a third time...Greedy ...

Jun 15Reply

oceanea @jolieespofx Yeah, I agree. Fortunately, it sounds like Congress members understand and are pulling to raise the earnings threshold so that the 1099s won’t apply to the bulk of us. (Check out the last slide above.) Wouldn’t hurt to write your Congress person to express your concern. I’ve gotta check to see what the latest is on this, too…if a bill will go to vote soon or…

Jun 15Reply

lemurianmuse Screw them. They get no more from me. #taxavoidance!

Jun 15Reply

oceanea @lemurianmuse Read the last slide. Might be worth a letter to your Congress person.

Jun 15Reply

ohazel It was my understanding that’s it’s also just taxable Profit, so it’s only applicable on the profit you made off those items. Fingers crossed the new legislation goes into effect! So silly for used clothing and gives us so much paperwork to prove we aren’t a business and aren’t making huge profits 😵‍💫

Jun 15Reply

oceanea @ohazel If nothing changes, I think you will get a 1099 from Poshmark and other places if your annual earnings are $600 or over. Poshmark has no way of knowing how much you paid to acquire the item you sold, so it would be up to you to itemize your taxes which allows you to account for all your expenses and subtract those costs from your earnings statement (1099)…and you would be taxed only on the net….which can be close to nothing if you take care to account for all your expenses.

Jun 15Reply

ohazel @oceanea what I mean is you will get the form automatically And when you file your taxes you will have to report what was profit and the price what you paid originally for it, you are then only taxed on the profit you made (was told to me by my accountant)

Jun 15Reply

ohazel @oceanea yep I was told this too!

Jun 15Reply

oceanea @ohazel Exactly. I am self-employed, so I already have to do this for my main business. You can keep track of mileage to/from Post Office or shopping runs. If there is a dedicated spot of your house that you use solely for your Poshmark “business”, you can give this square footage to your accountant as well and a percentage of your house payments or rental payments can also be claimed/deducted. Ink to fill the printer…cause you use that to print Posh labels, tape, tissue paper, etc etc.

Jun 15Reply

ohazel @oceanea thanks for the tips! Hopefully they revise the laws so we don’t have to go through all these silly hoops! 😂🙈

Jun 15Reply

oceanea @ohazel 🤞Hopefully. I may actually write my Congress person.

Jun 15Reply

ohazel @chill697 yes, I’m not sure what paperwork or how that looks on your taxes next year, you’ll still get the form but will need to declare what was profit/taxable income but you are not taxed on your sales if it’s not a profit from what you paid for the items (you can deduct shipping supplies, gas to the post office and lots of other things as well)

Jun 16Reply

oceanea @chill697 @ohazel So I already do this for my taxes, as I’m a self-employed contractor. Basically, keep your receipts for any “business expenses”. Receipts for the clothing items you purchased. Receipts for tissue paper, tape, printer ink, etc. Check your odometer before and after “business trips” for shopping or to/from post office. Easiest for your tax preparer to have a spreadsheet from you with all your expenses.

Jun 16Reply

oceanea @chill697 @ohazel You will not be able to file a 1040EZ. You’ll have to file your taxes with 1040 and fill out those pesky worksheets. I hire a tax preparer in January to do it for me. Costs me about $200…but then that $200 is a business expense and deductible. I’ll try to post some example spreadsheets a bit later…

Jun 16Reply

ohazel @oceanea ahhh yes, we used to do the 1040 itemized deductions, it’s been awhile. 😂 Makes sense, a spreadsheet definitely sounds like the way to go!

Jun 16Reply

lemurianmuse @chill697 I hate them too. I’ve dealt with them before over a multi million dollar estate with multiple liens. They try to intimidate people. I stood up to them and they left me alone. As I always say I will always pay my fair share but no more. Tax avoidance and tax evasion are two different matters. LOL 😝

Jun 16Reply

luckyladybug4u @chill697 Sorry to say that you will have to change the way you do taxes. I just now sold an item today (Aug. 29, 2022), and PM won't let me print out the shipping label until you give them your SS# or Tax ID # (for a business). So you will receive a 1099 form and have to claim your sales as income. It sucks! I agree with you 100% that these are just items we are selling, not really income. What's next, flea market sales to be claimed on income tax?! UGH....🤦‍♀️🤦‍♀️🤦‍♀️

Aug 29Reply

luckyladybug4u @oceanea Sorry to say that you will have to change the way you do taxes. I just now sold an item today (Aug. 29, 2022), and PM won't let me print out the shipping label until you give them your SS# or Tax ID # (for a business). So you will receive a 1099 form and have to claim your sales as income. It sucks! I agree with you 100% that these are just items we are selling, not really income. What's next, flea market sales to be claimed on income tax?! UGH....🤦‍♀️🤦‍♀️🤦‍♀️

Aug 29Reply

luckyladybug4u @ohazel Sorry to say that you will have to change the way you do taxes. I just now sold an item today (Aug. 29, 2022), and PM won't let me print out the shipping label until you give them your SS# or Tax ID # (for a business). So you will receive a 1099 form and have to claim your sales as income. It sucks! I agree with you 100% that these are just items we are selling, not really income. What's next, flea market sales to be claimed on income tax?! UGH....🤦‍♀️🤦‍♀️🤦‍♀️

Aug 29Reply

luckyladybug4u @ohazel It's already started. Sold an item today (Aug. 29, 2022), and PM won't let me print out the shipping label until I give my SS# for income tax 1099 purposes.........SUCKS!!!! 🤦‍♀️

Aug 29Reply

oceanea @luckyladybug4u I know. 🤦‍♀️ Same thing happened to me earlier in the year. You will only receive a 1099 if your Poshmark earnings are $600 or more. There is a motion in Congress to raise that $600 to a couple thousand or so. Hoping that happens 🤞. In fact, I haven’t checked recently to see where that motion is…

Aug 29Reply

luckyladybug4u @oceanea So what did you end up doing? I came to the conclusion that I'm going back to selling on the 'e' site as this whole thing is messed up! We only make a few hundred bucks and have this nonsense to deal with.

Aug 29Reply

luckyladybug4u @chill697 I don't know about you, but I don't want to give my SS# to anyone online. You don't know who can get a hold of it and for a few hundred dollars, it's not worth it. It can end up costing you thousands and thousands of dollars in the end if someone gets a hold of it, not to mention your credit could be ruined.

Aug 29Reply

oceanea @luckyladybug4u It’s a federal level change - to collect taxes from income made on online sites. The e site may send you a 1099 just as well. Best thing is to track all your expenses - the tissue paper, the tape, the mileage it takes to/from the post office and to/from clothing stores, etc….but, of course also keep receipts for all of your clothing purchases in 2022…the ones you sold but also the clothing that did not sell. Then itemize your taxes….

Aug 29Reply

luckyladybug4u @oceanea That's fine if you have an accountant or a 'business'. Then I could see where this whole thing would come into play. But for us small people who only sell their own stuff and barely makes $600 in sales, it's not fair at all. If I had money to pay an accountant, I wouldn't be selling my used clothing on PM. Some of my stuff is NWT, but still it isn't a business.

Aug 29Reply

luckyladybug4u @jolieespofx Sorry to say that you will have to change the way you do taxes. I just now sold an item today (Aug. 29, 2022), and PM won't let me print out the shipping label until you give them your SS# or Tax ID # (for a business). So you will receive a 1099 form and have to claim your sales as income. It sucks! I agree with you 100% that these are just items we are selling, not really income. What's next, flea market sales to be claimed on income tax?! UGH....🤦‍♀️🤦‍♀️🤦‍♀️

Aug 29Reply

oceanea @luckyladybug4u If you get a 1099 for 2022 for, say, $800….make sure to “find” $800 of receipts for clothing purchased, tissue paper, etc. When you itemize your taxes, you’ll report $800 income for your small business but you also get to claim $800 or whatever you “find” receipts for as expenses.

Aug 29Reply

oceanea @luckyladybug4u Basically, aim to match your expenses to the income on the 1099. $800 income - $800 expenses = $0 profit. You will be taxed on $0.

Aug 29Reply

luckyladybug4u @oceanea Thanks for the reply. I hear you, but honestly for the little sellers like me, it's not really worth all that. I only sell not that many items & I can't afford an accountant. I only reached the $600 recently because I had two big ticket items over $130. Thanks dear 🌹

Aug 29Reply

jolieespofx @lemurianmuse 😁👊

Aug 29Reply

jolieespofx @luckyladybug4u you are right of course but the Government is really stealing from us ...first of all they charging taxes for new item ...then charges again if we sell that item even if that item is used 🤬🤬..seller is paying and buyer is paying again ...that's a total bullshit ...it's another way to scrue American working class people ...sounds like Prince Charles saying : in the end you will have nothing ...it will be true soon ...sorry for my English...❤

Aug 29Reply

oceanea @luckyladybug4u Itemization doesn’t involve an accountant. But if you don’t like doing tax paperwork yourself, you can always find a tax preparer (not an accountant). Cheaper. I pay maybe $200. But that $200 is a business expense and deductible and your tax preparer will know that and deduct. I’ll look into where Congress is. Maybe they will raise the $600 limit. Write your Congress person! 💕

Aug 29Reply

luckyladybug4u @jolieespofx Thanks for your comment. I've got a good one for you. According to PM, they charge tax when you purchase clothing, according to which state you live in. Well, I live in NJ, and there is NO sales tax on clothing. However, PM charged me tax on something I bought! Sickening! So much for "according which state you live in".

Aug 29Reply

oceanea @luckyladybug4u Oh, that’s weird. I’d complain to Poshmark. Something must be wrong with their programming.

Aug 29Reply

luckyladybug4u @oceanea Question: By $600 or more 'earnings', do you mean 'net' earnings (what you actually received) or do you mean what the item(s) sold for? If you can answer this, I would be greatly appreciative dear. Thanks loads. 💜

Aug 30Reply

oceanea @luckyladybug4u If you received money for your sales at Posh totaling $600 or more, you will receive a 1099 from them. A copy of that 1099 also goes to the federal government. Neither Posh nor the government knows what expenses you incurred to make that $600 so unless you itemize to communicate what expenses you incurred, you will be taxed on that $600.

Aug 30Reply

oceanea @luckyladybug4u Oh, and no, not what the item sold for. If you look at all your sold items for 2022, add up all the money that actually hit your account. (You sell an item for $100, Posh takes $20, so you get $80. That $80 goes toward the pot that will accumulate toward the $600. Does that make sense?💕

Aug 30Reply

luckyladybug4u @oceanea You're a doll for getting back to me! So yes it does make sense as I know it, the 'net' is my earnings - my actual money I received after this and that. But what I don't understand is looking at the report I downloaded from PM, my NET earnings are only $423.28. No where near $600. So why are they wanting that information from me if I haven't met $600 yet?

Aug 31Reply

oceanea @luckyladybug4u I was prompted for that information (my soc) really early this year after I made my first sale of the year. It was a larger sale…so maybe larger sales trigger the prompt? It really sure. 🤷‍♀️

Aug 31Reply

oceanea * I’m not really sure.

Aug 31Reply

jolieespofx @luckyladybug4u hi ..I know in New Jersey there's no tax 😊...I'm gonna shop in your State ...two of my family members moved there from NYC ...I'm gonna go visit them and shop ..New York is going downhill.👇⬇️⏬️..going to move soon ...Jolie

Aug 31Reply

luckyladybug4u @oceanea Hello dear & thanks for the info. Maybe you can answer a question for me. (Poshmark will answer, but it will be in "uncommon lingo" and still not provide what I need). So it is the GROSS amount we are talking of, correct ($600)? However, I heard somewhere that if the seller gave shipping discounts, that is subtracted from the gross amount. Did you hear that too or do you know if it's correct. If you can help, greatly appreciated. Thanks much! 🌹

Nov 28Reply

oceanea @luckyladybug4u I honestly don’t know how Poshmark will calculate the amount on the 1099 they send you. Once you get it, you can figure that out, I guess 🤷‍♀️. But what I do know is that you are only obligated to pay taxes on the NET. So if you find the 1099 does include the shipping discount, you can claim the shipping discount as a business expense.

Nov 28Reply

oceanea @luckyladybug4u Hopefully Poshmark won’t include the shipping discount, any discount you give, nor the Poshmark 20% cut on the 1099…but if they do, those things are expenses and can be subtracted from the GROSS.) You’ll need to itemize either way if you want to reduce the NET amount on which you pay taxes.

Nov 28Reply

oceanea @luckyladybug4u Expenses that can reduce the NET include cost of the clothes you purchased that sold, shipping supplies, mileage to/from post office or clothing stores, the square footage of space in your house you use solely for Poshmark stuff (storage or packing area maybe). Keep receipts.

Nov 28Reply

oceanea @luckyladybug4u I get a tax professional to do my taxes - cheaper than an an accountant. The cost you pay the tax professional is also a deduction; the tax professional should automatically add that expense to your tax paperwork.

Nov 28Reply

luckyladybug4u @oceanea Thank you soooo much for your time and assistance; greatly appreciated.

Nov 28Reply

oceanea @luckyladybug4u No problem. 💕

Nov 28Reply

luckyladybug4u @oceanea Oh, I just saw this. I only sell a few hundred (right around $600) for the year, so I don't have a tax professional. If I could afford a tax professional, I wouldn't have to sell here on PM 😜 LOL

Nov 29Reply

oceanea @luckyladybug4u I only pay $200 for someone to do my taxes. And it’s an expense to subtract from the $600 or so you make from Posh so you can easily get that Profit-expense = Net for which you owe tax to zero. So, for me it’s worth it. But ya don’t need a tax professional. You can just do your taxes yourself. But you’ll need to itemize in order to claim expenses. (You can’t use the 1040EZ.) I just hate that extra paperwork so I get me a cheap tax professional.

Nov 29Reply

oceanea @luckyladybug4u I’m also going to write my Congress person to petition that they raise the amount for 1099 back to the thousands of dollars it used to be. It only changed to $600 recently and I don’t think it was really anticipated/intended to hit the small time second hand sellers as it has. There is bipartisan support for raising the threshold.

Nov 29Reply

luckyladybug4u @oceanea Oh, I see. So you answered a question I was holding in my head. The money you'd pay to have your taxes can be a deduction from THAT year(2022)? Even though you are actually paying the tax professional in 2023? You are a Godsend ! 😜💜 If that is the case, then I will break down and go to a tax preparer.

Nov 29Reply

luckyladybug4u @oceanea I am one to usually do something like that (write to the congress person), but it's so late in the year to be concerned with the tax year 2022. It's almost over, and I don't see the law changing in the next 30 days. Jeff Van Drew is for my area in NJ and I did contact his offer on another matter.

Nov 29Reply

luckyladybug4u @oceanea I hate this president! I'm not going to get political, because I don't care for any of them (LOL), but this really douchy! Why is the little guy being attacked? Go after those big corporate people 😜👍

Nov 29Reply

oceanea @luckyladybug4u I hear ya…but the Poshmark 1099-K situation doesn’t really have anything to do with any president. It was a result of a bipartisan congressional approved American Rescue Act of 2021 and Cares Act of 2020 (two different presidents in office) which were stimulus packages during Covid. Lowering the 1099 threshold was I believe an unintended consequence -

Nov 29Reply

oceanea @luckyladybug4u not really intended to affect the small time sellers on Posh and the like …but rather to provide fiscal aid and protect workers…the 1099 threshold is a tiny tiny clause in an much larger bill that, in part, provided those checks we all received during early Covid. Which is why I am writing my Congress person. There is an effort on both sides of the aisle to raise the 1099-K threshold to higher

Nov 29Reply

oceanea . I think Congress hearing from their constituents about how the 1099 lower thresholds have negatively affected small time second hand sellers on Poshmark and the like will make a difference. 🤷‍♀️💕

Nov 29Reply

oceanea @luckyladybug4u . I think Congress hearing from their constituents about how the 1099 lower thresholds have negatively affected small time second hand sellers on Poshmark and the like will make a difference. 🤷‍♀️💕

Nov 29Reply

gathering1 FYI on December 23,2022 congress repealed this, the year 2022 will be considered a “transitional” year and we are not supposed to get a 1099-k unless our earnings are $20,000.! Spread the word! Hopefully the accounting staff at poshmark caught this new ruling!

Dec 31Reply

oceanea @gathering1 Yes! Yay. Was just reading about this. Trying to get the finer details. Thank you!

Dec 31Reply

oceanea @lizwt @kandi_queen @lmmart24 @winelover0626 @sweet1957 @kontogonis @pm80 @jolieespofx @lemurianmuse @ohazel @chill697 @luckyladybug4u @gathering1 UPDATE! Good news. No 1099-Ks or $600 threshold for 2022. I need to read further for more details and looks like there will be more revisions to come, but good news for now. Read a little about it in the pictures of the Yahoo Finance article above.

Dec 31Reply

pm80 @oceanea Fantastic! Thanks for the update!!!

Dec 31Reply

luckyladybug4u @oceanea YEAH 🌟👌🍾😍 THAT IS THE BEST NEWS WE COULD RECEIVE. THANK YOU SO MUCH FOR THIS AND HAVE A WONDERFUL NEW YEAR 💜

Dec 31Reply

tokidokitiger @oceanea Thanks for the update 🙌👍👍

Jan 03Reply

amaliagasparyan Thank u so much for this information. It should be shared!!!

Jan 06Reply

oceanea @amaliagasparyan You’re welcome. Please share. We still need to see what the IRS will do in 2023, but it sounds like they understand the $600 threshold for lil’ sales on Poshmark and the like is a problem. Perhaps Congress will make the appropriate legislative adjustments.

Jan 06Reply

kira579318 I donated $5,000 worth of new clothing because of this law for the simple fact Covid drove me insane and the stress raised cortisol and I went from sz 00 to sz 8 since Feb 2020. Now I’m selling off the paltry few left because I had to buy proper fitting clothing. I don’t think used clothes or non fitting clothing should be an issue it’s not like we run a BUISNESS with 20k listings. I feel sick over it it makes me sick

Jan 18Reply

kira579318 And as soon as I hit $500 I’m closing it down for year and donating or doing flea market style stuff. Because I don’t make much. At all. And I don’t do this full time thanks for the information though feel free to lowball me and sell higher I have nothing to lose now

Jan 18Reply

oceanea @kira579318 You may not need to. I’m hoping laws will change and the threshold for 2023 will be raised. Doesn’t hurt to write your Congress person about your concern. 💕

Jan 19Reply

kira579318 @oceanea I know my representative hes not only an old family friend but I was close friends w his son in high school and college. I have to stop st around 550$ I cannot risk losing my ability to buy too because I also buy on here. until posh stops this 1099 form I can only sell sbout$550 do if u want cheap spell on excellent Condition to resell make me any reasonable offer I'll go as low as I possibly can. TRR gives you only $7 for spell and FLL 💕💕💫💫💫🆗️

Jan 19Reply

shoplatifah365 Thanks ladies, for all your commenting - just doing my taxes now and you've all just helped me get a clue!! 😆😆

Apr 10Reply

susanrodriguez Thanks so much for keeping us posted!👼

Jan 04Reply

oceanea @susanrodriguez No problem 😘. Hope you are well.

Jan 04Reply

tokidokitiger @oceanea Appreciate the update!! 😉🦌👍

Jan 04Reply

susanrodriguez @oceanea Happy New Year! 🎉🍾🎶

Jan 04Reply

its_carina @oceanea what about 2023. I didn’t get a 1099-K. Do I still have to report my earnings?

Mar 21Reply

oceanea @its_carina The third slide above explains it…The threshold for 2023 is essentially $20K, so unless you sold a whole lot, you won’t get a 1099.

Mar 21Reply

its_carina @oceanea thank you

Mar 28Reply