Seller Tax Guide
Poshmark Taxes: What Every Seller Needs to Know
Whether Poshmark is taxable comes down to whether you're reselling your own closet or running a resale business. Poshmark doesn't withhold taxes, and the 1099-K it may send reports gross sales, not profit. Here's how Poshmark taxes work once you're selling as a business.
How Poshmark taxes work
You're a self-employed seller
The marketplace doesn't withhold taxes. If you sell as a business (regularly and for profit), you owe income tax plus self-employment tax on your net profit — what's left after the cost of the goods and your selling expenses.
Self-employment tax is 15.3%
That's 12.4% Social Security + 2.9% Medicare on your net earnings — on top of regular income tax. It funds the benefits an employer would normally split with you.
Deductions lower your taxable income
Business expenses — equipment, software, supplies, and phone — reduce the net earnings you're taxed on. Tracked properly, they often save more than any other single move.
You pay as you go, quarterly
Instead of one April bill, the IRS expects estimated payments four times a year. Paying quarterly avoids an underpayment penalty.
Do you get a 1099-K — and is your Poshmark income taxable?
Poshmark processes buyer payments, so it issues a Form 1099-K when your sales reach the IRS reporting threshold for the year. That threshold has changed in recent years, so you might get a 1099-K for modest sales — or not get one and still owe tax. It reports gross sales before Poshmark's commission and shipping, so it isn't your taxable profit.
Whether you owe tax depends on what you're doing. Reselling your own used clothing for less than you paid is generally not taxable (and the loss isn't deductible). But buying to resell for profit is a business: you report it on Schedule C, deduct your cost of goods and expenses, and owe income tax plus the 15.3% self-employment tax on the net profit. Confirm your situation with the IRS.
What Poshmark sellers can deduct
Cost of goods sold (COGS)
What you paid for the clothing you resold is subtracted from your sales as COGS — keep records of each item's cost.
Poshmark commission
The commission Poshmark takes from each sale is a deductible business expense.
Shipping (if you cover it)
Any postage or upgraded shipping you pay rather than pass to the buyer is deductible.
Packaging & supplies
Mailers, boxes, tissue, tape, and packing materials used to ship orders.
Home office & storage
The part of your home used regularly and exclusively to store inventory or run the business may qualify.
Sourcing mileage
Miles driven to source inventory (thrift runs, estate sales) are deductible at the IRS standard mileage rate.
Frequently asked questions
Does Poshmark take out taxes for me?
No. Poshmark doesn't withhold income tax. If you sell as a business, you owe income tax plus the 15.3% self-employment tax on your net profit (sales minus cost of goods and expenses).
Do I get a 1099-K from Poshmark?
Poshmark issues a 1099-K when your sales reach the IRS reporting threshold for the year (the threshold has changed recently). It reports gross sales before commission and shipping — report all of your business income whether or not a form arrives.
Is selling on Poshmark taxable income?
Reselling for profit is a taxable business on Schedule C. Selling your own used clothing for less than you paid generally isn't taxable, and that loss isn't deductible. A 1099-K alone doesn't make income taxable — but you must report and reconcile it. Confirm with the IRS.
What can Poshmark sellers deduct?
Your cost of goods (what you paid for items), Poshmark's commission, any shipping you cover, packaging, a qualifying home office or storage, and sourcing mileage. Records of each item's cost are essential.
How much should Poshmark sellers set aside for taxes?
A common rule of thumb is 25–30% of your net profit (sales minus cost of goods and expenses) for income tax plus the 15.3% self-employment tax — your exact rate depends on your total income and state. Use the Tax Set-Aside calculator for a tailored number.
Authoritative IRS resources
Free calculators for Poshmark sellers
Stop guessing what you owe
UnifyOne tracks your clothing resale earnings, expenses, and tax set-aside automatically — so quarterly taxes are never a surprise.
This guide is educational information, not tax advice. Tax rules, thresholds, and the IRS standard mileage rate change yearly — confirm current figures with the IRS or a qualified tax professional for your situation.