What is the 1099-K threshold in 2026? (Not $600)
For a marketplace or payment app that settles payments between buyers and sellers — what the IRS calls a third-party settlement organization (TPSO) — the 2026 federal reporting test is both of these, in the same calendar year:
- gross payments for goods or services of more than $20,000, and
- more than 200 transactions.
That is the rule the IRS confirmed on October 23, 2025 in the Form 1099-K FAQ that followed the One Big Beautiful Bill Act, signed in July 2025. The same two-condition test appears in the IRS Publication 1099 for 2026. It is not a 2026-only number: the law reinstated the pre-2021 threshold retroactively to 2022.
Why does so much of the internet still say $600? Because the American Rescue Plan Act of 2021 did lower the threshold to $600 with no transaction minimum — and it never applied. The IRS postponed it three times (Notices 2023-10, 2023-74 and 2024-85, cited in the IRS 1099-K FAQ), and the 2025 law repealed it retroactively. Articles, listicles and even some platform help pages written between 2022 and 2024 are still repeating a rule that was never enforced.
What the threshold does not mean
This is the sentence that costs resellers money every spring. The IRS writes it plainly in Q7 of its 1099-K FAQ: the reporting threshold does not affect whether payments are taxable or whether a return must be filed — all income is taxable unless the tax law says it is not, even if you never get a Form 1099-K. Cash sales, a friend paying you by transfer, a bundle settled off-platform: all of it is income.
Read the threshold as a paperwork rule for the platform, not as a tax-free allowance for you. Below $20,000 and 200 transactions, the platform is not required to send the IRS a form, and your obligation is exactly the same as it was above it. That is also why the practical difference between one 1099-K and no 1099-K is not the amount of tax — it is how much evidence you can produce if anyone asks.
Does Vinted report to the IRS?
If the platform collects the buyer's payment and pays you out afterward, it is the TPSO for that transaction — the IRS defines it as the organization with the contractual obligation to pay participating payees, and gives "apps used to handle the money transfer between buyers and sellers" as the example. A TPSO that crosses the $20,000-and-200-transaction test must file Form 1099-K with the IRS and send you a copy. That is a legal obligation on the platform, not a policy choice, and it applies to Vinted US sales the same way it applies to Poshmark, Mercari, Depop and eBay. Mercari states the identical two-condition test in its own help center, and notes that states with lower thresholds get a copy too.
Two things not to confuse with this. State sales tax is collected and remitted by the marketplace as a facilitator — Vinted explains that in its sales tax help page — and it is not your income tax. And a payout statement is not a tax form: what lands in your bank account is your money after platform fees, while what the IRS sees on a 1099-K is the gross figure. Our Vinted USA reseller guide covers what sells and how the platform pays out; this page covers what you owe.
Which states have a lower 1099-K threshold?
State law was not changed by the federal law. A state can require its own 1099-K at a much lower figure, and platforms file those copies separately. As documented today by the states and by payment platforms:
| State | State 1099-K trigger | Source |
|---|---|---|
| Massachusetts | $600 or more in gross payments, no transaction minimum | Mass.gov / 830 CMR 62C.8.1 |
| Virginia | $600 or more | Virginia Tax |
| Maryland | $600 (as listed by payment platforms) | PayPal 1099-K thresholds |
| Illinois | more than $1,000 and 4 or more separate transactions | Illinois DOR, Publication 110 |
| Vermont | $2,000 — see the note below | Vermont Department of Taxes |
Vermont is the proof that these lists age badly. Vermont's statute ties its reporting rule to the federal de minimis figure in IRC §6041(a), which used to be $600 — that is the number nearly every article still prints. The 2025 federal law raised that §6041 figure from $600 to $2,000 for payments after December 31, 2025, and the Vermont Department of Taxes now says $2,000 on its own 1099-K page. Meanwhile several other states appear on some marketplace lists with figures that disagree with each other.
Which means the honest answer to "what is my state's threshold" is: check your state's department of revenue page and your platform's tax help page for the current year, and treat any blog table — including this one — as a starting point rather than a rule. If you sell into a low-threshold state and receive a form for a few hundred dollars, you now know what to do with it: read the next sections, not the panic.
Hobby or business: which one are you?
Both are taxed on income. Only one lets you deduct the costs of getting that income, and only one carries self-employment tax. The IRS lists the factors in Hobby or business: what people need to know if they have a side hustle: do you put in time and effort with the intent to make a profit, do you depend on the income, do you keep complete books, do you change your methods to improve profitability, do you have the knowledge to run it as a business. No single factor decides it.
| Hobby | Business | |
|---|---|---|
| Where income goes | Schedule 1, line 8j — "Activity not engaged in for profit income" | Schedule C, Profit or Loss from Business, plus Schedule SE |
| Expenses | No deduction for cost of goods, fees, shipping or mileage | Cost of goods sold, platform fees, shipping, supplies, mileage |
| Self-employment tax | Not owed | Owed on net profit |
| Losses | Cannot be used | Deductible against business income |
Two details keep this honest. The line reference comes from the current Instructions for Form 1040, where Schedule 1 line 8j is listed as "Activity not engaged in for profit income" — and the reason a hobby gets no expense deduction is that hobby expenses belonged to the miscellaneous itemized deduction category, which was suspended beginning in 2018 and made permanently disallowed by the 2025 law. At the same time, the IRS's own 1099-K guidance lists "gig worker, freelancer, hobby seller and other self-employed" together and sends them to Schedule C. That tension is real, it is exactly the kind of thing a reseller can get wrong alone, and it is the strongest argument in this article for paying a professional for one hour.
If you are a business, the IRS Tax Guide for Small Business (Publication 334) is the reference for the Schedule C lines where cost of goods sold is figured (lines 35 through 42) — the thrift receipts, the sourcing haul, the wholesale lot you split across twenty listings. Our guide to reselling profit margin covers the arithmetic per flip.
What is self-employment tax on reselling?
Once you are a business, net profit is not just income tax. The IRS states the self-employment tax rate is 15.3% — 12.4% for Social Security plus 2.9% for Medicare — and that you generally must pay it when your net earnings from self-employment reach $400. The amount actually subject to the tax is normally 92.35% of your net earnings (IRS Topic no. 554), and you deduct the employer-equivalent half when figuring adjusted gross income. It is calculated on Schedule SE and attached to your return.
The practical consequence for a reseller is a chain, not a single number: sale price, minus cost of goods, minus platform fees, minus shipping you paid, minus supplies, equals net profit — and that is what the self-employment tax and your income tax apply to. A $30,000 gross year can be a $4,000 taxable year or a $12,000 taxable year depending entirely on whether you recorded what you paid for the inventory.
What if you sold at a loss?
Selling your own clothes, a used couch or last season's sneakers for less than you paid is not taxable income, and the IRS is explicit that the loss on the sale of a personal-use item is not deductible either. No gain, no deduction — a wash.
The wrinkle is the form. In a low-threshold state you can receive a 1099-K for a closet clear-out that produced no profit at all, and the IRS has published the fix in its FAQ on what to do with a 1099-K: report the 1099-K amount as other income on Schedule 1 and enter an offsetting adjustment of the same amount, described as "Form 1099-K Personal Item Sold at a Loss". The two entries cancel, and your adjusted gross income is unchanged. If you already file Form 8949 and Schedule D for other transactions, the FAQ offers the alternative: report the proceeds and your basis there, enter code "L" for the nondeductible loss, and the adjustment in column (g) brings the result to zero.
Two caveats. Never claim more basis than the proceeds when you use the offsetting adjustment — the point is to zero out a form, not to create a deduction you are not entitled to. And because line numbers on Schedule 1 are revised from year to year, confirm the current ones in that year's instructions or with your preparer. Selling at a gain is the opposite case: the gain is taxable even on personal items, and it belongs on Form 8949 and Schedule D.
What is the mileage rate for sourcing trips in 2026?
2026 has two rates, because the IRS raised the business rate mid-year as fuel prices moved:
- 72.5 cents per mile for business miles driven January 1 – June 30, 2026 (IR-2025-128).
- 76 cents per mile for business miles driven from July 1, 2026 onward (Announcement 2026-11, Internal Revenue Bulletin 2026-29, which modified Notice 2026-10).
Both figures are on the IRS standard mileage rates page. This is a business deduction, so it exists only if you are running a business rather than a hobby, and it covers business driving — thrift and estate-sale runs, the wholesale pickup, the post office or drop box trip. Personal driving, including your regular commute, is not deductible mileage. Log the date, destination and purpose as you go; reconstructing a year of sourcing trips in April is where the deduction quietly disappears.
What to track per sale — and why a payout statement is not profit
Every dollar you are allowed to subtract has to come from a record you kept. The IRS describes a 1099-K box 1a as a gross figure that includes no adjustment for fees, credits, refunds, shipping, cash equivalents or discounts, adding that those items "are not income" and can be deducted from the gross amount. Your platform's payout report does the opposite of that: it is already net of fees, so as a profit statement it is close to useless, and as a tax record it tells you nothing about what the item cost you.
| Track this | Why it matters at tax time |
|---|---|
| Sale price per item | The gross the platform reported, split back into individual sales |
| Cost of goods, per item | Without it there is no cost of goods sold — the single largest deduction a reseller has |
| Platform fees | Not included in the 1099-K gross, and deductible from it |
| Shipping you paid | Same: excluded from the form, deductible when you bore the cost |
| Packaging and supplies | Mailers, tape, labels, printer ink — ordinary business expenses |
| Refunds and returns | The form does not net them out; your records must |
| Mileage with date and purpose | Supports the standard mileage deduction at the 2026 rates above |
The reason to collect this per item rather than per month is that a 1099-K arrives as one lump sum. To reconcile it you need to show which sales it contains, what each one cost, and which adjustments belong against it — and bundles, cross-platform listings and partial refunds make that impossible after the fact. A spreadsheet can hold it if you keep it disciplined; a profit tracker does it as you list. Margeo's reseller inventory tracker keeps item cost, sale price, fees and shipping per flip, which is the shape a 1099-K reconciliation needs.
When to get a tax professional involved
Bring in a CPA or enrolled agent if any of these is true: your activity is profitable and growing, you are unsure whether you are a hobby or a business, you received a 1099-K you cannot explain, you sell across several platforms and states, or you are approaching the point where estimated quarterly payments matter. One consultation usually costs less than a single misclassified year.
Two things this page deliberately does not do: it does not compare what each marketplace charges — that is what our Vinted seller fees, eBay seller fees and Depop seller fees breakdowns, the eBay vs Mercari comparison and the full platform fees comparison are for — and it does not give you a number to file. Selling in Europe instead? The equivalent reporting rule there is DAC7, explained in our DAC7 guide for online sellers. Shipping costs you can and cannot deduct are covered in shipping costs for resellers.
Official sources used in this guide
- IRS news release IR-2025-107 (October 23, 2025) — the $20,000 / 200-transaction threshold restored.
- IRS Form 1099-K FAQs: general information — thresholds, exceptions, and the rule that all income is taxable with or without a form.
- IRS Form 1099-K FAQs: what to do if you receive one — personal items sold at a loss, offsetting entries.
- IRS Publication 1099 (2026) — the two-condition TPSO test and the §6041 threshold increase to $2,000.
- IRS Topic no. 554, Self-employment tax — 15.3%, 92.35% of net earnings, the $400 threshold.
- IRS Topic no. 409, Capital gains and losses — losses on personal-use property are not deductible.
- IRS, Hobby or business — the factors that separate the two.
- IRS Publication 334 — cost of goods sold on Schedule C, lines 35–42.
- IRS standard mileage rates, IR-2025-128 and IRB 2026-29 — 72.5 and 76 cents per mile in 2026.
- Mass.gov, Virginia Tax, Illinois DOR, Vermont Department of Taxes — state thresholds.
- Mercari 1099-K FAQs and PayPal 1099-K thresholds — how platforms apply the test.