Right now, while you're reading this, thousands of people are listing a jacket on Vinted. Some of them are cleaning out a closet. Some of them are running a real little business and haven't said the words out loud yet. And almost none of them know which one the IRS thinks they are.
I get asked about this constantly, usually in February, usually in a panic. So let's go ahead and take the fear out of it.
The honest answer depends on why you bought it
That's really the whole thing. Not how much you sold, not which app you used. Why you bought the item in the first place.
The closet cleanout
If you're selling your own things for less than you paid for them, that's generally not taxable. You didn't make money, you took a loss, and that loss isn't deductible either. The jeans you paid more for than you sold them for are not a tax event.
But if you made a profit on a personal item, that profit is taxable. So if something you owned sold for more than you paid, the gain counts.
The reseller
If you're buying things specifically to resell, that's business income. You report what you sold and subtract what the items cost you, and the difference is what you're taxed on.
Here's the simplest version I can give you. You buy a jacket for $8, you sell it for $40, and packaging runs you about $1. Your profit is $31. The $31 is what matters at tax time, not the $40.
One more piece people miss: if your net profit is $400 or more, you generally owe self-employment tax on top of income tax. That catches folks off guard, because they were thinking about income tax only.
What a 1099-K actually means
Platforms generally send a 1099-K once you pass $20,000 in sales and 200 transactions in a calendar year under the federal threshold. That's the form that reports your payments.
And here's the part I want you to hear, because it trips up good people every year: not getting a 1099-K does not mean the income isn't taxable. The form is a report, not the rule. Whether you owe depends on what you did, not on what paperwork showed up in your inbox.
What you can deduct
If you're reselling, you get to subtract the real costs of doing it. Cost of goods sold, which is what you paid for the item, gets deducted when the item sells, not when you buy it. That one surprises people, and it's exactly why tracking inventory matters.
- Platform and payment fees
- Shipping you paid for
- Packaging supplies
- Mileage for sourcing trips
- The business share of your phone and internet
- Tools of the trade, like a label printer
If you want the tracking already built for you, The Reseller Tax & Inventory Kit is $15, it's an instant download, and it has the inventory, sales, expense and mileage pages ready to print. You'll find it at /reseller-tax-kit.
How to keep records without buying software
You don't need a subscription. You need a habit. Write down what you bought, what you paid, what it sold for and what the sale cost you, and log your sourcing miles the day you drive them. Pick one night a week and catch up. Ten minutes is plenty, and it's so much easier than reconstructing a year in March.
Hang onto your records for at least three years after you file. If a question ever comes up, the records are the answer.
When to talk to a professional
If your selling has turned into something steady, or you're not sure whether you crossed from cleanout into business, that's worth a conversation. I'm an Enrolled Agent, which means I'm federally licensed and I can represent you before the IRS. If you want the plain-English version of what that means, read our page at /what-is-an-enrolled-agent.
And if your numbers have gotten big enough that a printed tracker isn't cutting it anymore, that's usually the point where bookkeeping earns its keep, and you can read how we handle that at /bookkeeping. Either way, you can book a free 15-minute Reseller Tax Check-In and I'll tell you honestly whether this is something to worry about.
This article is general education and is not tax, legal or financial advice. HB Financial Group is not affiliated with or endorsed by Vinted, Poshmark or eBay.