UPDATE: PLEASE READ. New TAX Requirements If You Sell >$600/Yr
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**2.22.24 UPDATE:
Old threshold of $20k/200 transactions for 2023. $5K for 2024. However, some states may have lower thresholds inc AR, DC, IL, MA, MD, MT, NJ, VA, VT. Thank you @izeandirie!
Get a 1099-K & Arenโt Self-Employed/Small Business: https://rb.gy/5tofky
**
Beginning January 1, 2022, online marketplaces, such as Poshmark, will be requiring all sellers who sell more than $600 in one tax year, to report all sales to the IRS via a Form 1099-K. This means that I will be required to submit my personal info (SSN, etc.) to Poshmark & pay taxes on my sales. I will have to track all of my expenses & purchase prices for everything I sell for deduction purposes so I do not overpay Uncle Sam. This converts an already time-intensive hobby into a full time business.
I'm a mom of 2 toddlers & work a FT job. Selling is meant to cover lost income during the pandemic, re-home unused goods & just have fun. This requirement will increase workload & costs & I have to make that up. This is a small-scale example of why price of goods increase when the government increases taxes on business. ๐คทโโ๏ธ
โผ๏ธ CANCELED ORDERS DO COUNT TOWARDS YOUR TAXABLE INCOMEโผ๏ธ Canceled orders count as an expense that you may deduct at tax time. In other words, instead of the IRS factoring it in for you, they leave everything up to you in hopes that you donโtโฆ& they collect more $$. WRITE TO YOUR CONGRESSMAN to change the law!!
If you have any questions or concerns, please message me or leave a comment below.
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mixon4christ
@multarjr Wow, thx for posting this, I wasnโt aware. ๐ฃ๐๐ซ๐
thewalkencloset
@mixon4christ youโre welcome. Itโs unwelcome news but better to know whatโs coming than get sideswiped by the IRS. So far, I havenโt gotten any notices from Poshmark about this but I have from other platforms. So I have risen my prices yet. Just know that this reporting is a BIG pain in the butt. HUGE.
thewalkencloset
@mixon4christ *havenโt* risen prices yet.
scralice
@multarjr I cannot get any answer regarding Poshmark. Iโm hoping we see an announcement soon. Iโm not going to sell anymore than $600 on posh. This was fun for the last two years.
thewalkencloset
@scralice I haven't seen anything yet but I know it's coming. M won't stop pressing on submitting my tax info. So annoying. I haven't sold >$600/yr on M anyway, so I plan on closing up shop there. But I make that in a month on here. How are you not going to sell $600/yr on here? Close your closet once you approach the threshold? I saw you put higher price items as Not For Sale. If this happens, it really sucks.
scralice
@multarjr yep Iโm going to close my shop until next year๐. What a joke. Things are getting crazier and crazier. Happy New Year to us.
thewalkencloset
@scralice thatโs so sad because you have a great closet! I donโt know how these selling platforms donโt see how this might affect their members, and ultimately, their bottom lines. I know E bay was fighting it. And the irony is that it was passed in the American Rescue Act. What a joke. โRescueโ my butt. If itโs implemented, it wonโt be just this year.
thewalkencloset
@scralice unless itโs repealed by Congress. I think.
bubbles1971
Very upset about this too, and that Posh didn't give us all a heads up before like 12/31 or 1/1 as I think I have already hit it or close- Posh won't confirm which figure they are counting (if includes tax/ship or not)- am debating and prob closing my closet too
thewalkencloset
@bubbles1971 Ya, I still haven't seen anything from Poshmark on this matter. I think I'll send them a message asking about it. I'm already on the hook if it's now $600. It's so frustrating.
bubbles1971
@multarjr they sent me an email about a week ago about the rules, but didn't say if I hit it yet- I don't understand why they are emailing individually and not putting a notice right on the site or news feed etc so people are aware BEFORE it's too late to get out. Whenever I email them I get a generic response and they just say ask a tax professional
thewalkencloset
@bubbles1971 I just combed through my email and I have not seen anything from them. They ABSOLUTELY SHOULD be posting about it on the feed! I remember seeing a note from the CEO at the top of the feed at the end of 2021. I expected to see something about it in that but nothing was mentioned. I'll try emailing them but I'm sure I'll get the same response as you did.
thewalkencloset
@bubbles1971 I just found this in their FAQs when I searched "IRS":
"If you meet the $600 gross sales threshold for the 2022 calendar year (including fees, shipping costs, sales tax, refunds, and canceled orders), you will receive communications from Poshmark asking you to update your account with the following taxpayer information..."
thewalkencloset
Why on earth would CANCELED ORDERS count towards gross sales?! They're canceled and we don't receive any payout for them!
bubbles1971
@multarjr that's what it said in the email I got too, not sure why everyone not getting and expect people to hunt that info down, I think lots of people unaware.
bubbles1971
@multarjr I know, cancelled shouldn't count nor should taxes and shipping as they are paid by buyer to Posh not to us, unlike some other sites. Posh couldn't tell me for sure if counting that or not or what total going by. When I look in my sales report it shows $0 for shipping, so not sure if they add it back on somewhere
solace_curated
@bubbles1971 @multarjr so if they wonโt send a 1099k, what did you do? My husband is freaking out. I sold 1700 on P and 1100 on M.
thewalkencloset
@solace_curated Iโm assuming youโre referring to the 2021 tax year. No 1099s will be sent out for this purpose for 2021 unless you sold >$20K because the lower threshold took affect this tax year and going forward.
crystalg13
@bubbles1971 did you figure out what amounts count towards the threshold? I emailed them but havenโt heard back. Trying to figure out if I hit the threshold or not!
bubbles1971
@crystalg13 No, the times I emailed them just got a generic quote from their faqs etc saying it includes fees, ship, taxes etc- they never really answered specifically if I hit threshold and I assumed I didn't since they haven't asked for my SSN etc yet. Put my closet on vac mode prob til next year unless/until this all gets reversed.
bubbles1971
@crystalg13 No, the times I emailed them just got a generic quote from their faqs etc saying it includes fees, ship, taxes etc- they never really answered specifically if I hit threshold and I assumed I didn't since they haven't asked for my SSN etc yet. Put my closet on vac mode prob til next year unless/until this all gets reversed.
thewalkencloset
@bubbles1971 If you go to Seller Tools -- Closet Insights, you can see how much you've sold year-to-date (select "Current Year" in the upper right in the app). That will give you some idea if you met the threshold or not.
happygilmore13
@multarjr do we know why it went from $20k to $600 that seems really insane?!?!?!
thewalkencloset
@stacybarrett465 it is insane but it was changed in the American Rescue Act passed in 2021. So much for โRescue.โ ๐
happygilmore13
@multarjr who is it rescuing itโs only hurting people who do this for fun and I mostly use my funds to buy other items on Poshmark. Does it matter if I paid more for the items than what I sold?
thewalkencloset
@stacybarrett465 so it was one of those things added to the bill that has the pandemic stimulus checks. So you might have gotten a check (we didnโt) but youโll have to pay more in taxes. ๐ Your questions points to the pain in butt about itโif you track and keep records of what you originally paid for items you sell, you can deduct that from your taxes, reducing the amount you owe. BUT, itโs A LOT of bookkeeping! You have treat it as a small business.
happygilmore13
@multarjr thank you for the info. Those checks were in 2021 not 2022 so it really still doesnโt make any sense but what can I do?
thewalkencloset
@stacybarrett465 The bill was passed in 2021. The new threshold for the tax liability went into effect Jan. 1, 2022.The only thing that you can do at this point is stop selling before you hit that threshold OR track your expenses to lessen your tax burden. Include any expenses for shipping materials, thank you cards, printer paper, etc. But you should know that canceled orders and shipping counts toward the tax liability. Don't ask why, because it shouldn't, but it does.
happygilmore13
@multarjr shipping & cancelled orders? We donโt pay shipping and a cancelled order does not contribute to sales. I only have 1 cancelled order anyway but that doesnโt make any sense. I guess I will wait and see what Poshmark sends me at the end of 2022/beginning of 2023 I really donโt sell much but I technically am over the $600 for 2022. Of course, I just started selling online just mine & my daughters clothes and jewelry a few months ago. My luck ๐
thewalkencloset
@stacybarrett465 ya, I have no idea why those things count towards the taxable amount because I agree with you! THAT makes no sense at all. And I have a few hundreds dollars worth of canceled orders already. That's why I block people who cancel without notifying me because it hurts me tax-wise. Best of luck to you!
zoeserendipity
Thank you for posting! Iโve had to raise the prices on several of my boutique items for the same reason. I started Poshmark just to sell a Michael Kors purse and found myself hooked. It is a lot more work than some may think. This is my full-time job now. May I use your posts and very well written description in this listing? ๐ธYou have a beautiful closet ~ Zoe
thewalkencloset
@zoeserendipity I started about the same time as you, trying to get rid of a few items. Then I had a sudden uptick in sales in February 2020 & I was hooked. Now, I have 2 FT jobs! Unfortunately, the passing of the bill (and now a larger IRS), increases our taxes & prices had to go up. You are more than welcome to use my posting! Thank you for asking & the best of luck in this selling environment.
zoeserendipity
@multarjr โค๏ธ
luckyladybug4u
@multarjr Hello - 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....๐คฆโโ๏ธ๐คฆโโ๏ธ๐คฆโโ๏ธ
luckyladybug4u
@stacybarrett465 How would PM be able to report yours as income if they don't have your SS#. I just found out about this whole thing today as I tried to print a shipping label, and it popped up for me to give my SS# and I couldn't print the label otherwise. I haven't given it to them.
luckyladybug4u
@multarjr You can raise the prices on your items if you want, but it just deters things because #1, maybe you'll miss out on selling because prices are more than people want to spend and #2, if you do sell at higher price, it will only knock you over the $600 amount.
luckyladybug4u
@zoeserendipity Raising the prices may backfire on you. Buyers might pass up your item because it's too $$$$. Also, if you do sell items at higher prices, it'll put you over the $600 level. Right?
thewalkencloset
@luckyladybug4u I had to give PM my SSN back in January because thatโs when I hit the $600 threshold & I needed to print a shipping label. Despite raising prices in January, Iโm still exceeding my sales from last year. I run sales and giveaways, which help. Everyone is in a tough pickle right now, whether youโre selling or buying. It stinks.
thewalkencloset
@luckyladybug4u Iโm sorry that you learned about it in such an abrupt way. PM really missed the mark in notifying Poshers, most likely because they feared a mass exodus of their mid- to larger volume sellers.
luckyladybug4u
@multarjr Or, you can just have them send you a download and you can view each and every item, like I did. Everything is itemized from the sale amount, net profit, taxes taken, item description, etc.
luckyladybug4u
@crystalg13 Go to "your sales" and you can have them send you a link to 'download' it. Everything is itemized for you. You can choose Jan. to today, or 2021.
luckyladybug4u
@scralice I'm with you girl. ๐ I had a nice run for the past 3 1/2 years and up until now, I never heard of this $600 threshold. I went to print a shipping label for a recent sale, and it popped up for me to give my SS# for income tax. NOT! I hear remarks like, keep your receipts and itemize and accountant. Seriously? PM is a past time for me to earn a little extra money. So not worth all this nonsense.
thewalkencloset
@luckyladybug4u thanks. Iโm aware of all sales tools as I use them weekly. ๐ Iโm WELL over the $600 threshold but I decided to bite the bullet and just run with it. I canโt wait for my first audit. ๐
luckyladybug4u
@multarjr So is it $600 for the calendar year (like January to Dec.)? Or is it $600 since this thing started (whenever that was).?
luckyladybug4u
@multarjr Actually, I think PM will lose us smaller sellers because we can stop selling and it won't hurt us to stop. But if you're a big volume seller, you will more than likely continue to sell as it's a continual thing.
thewalkencloset
@luckyladybug4u you never heard of it because Poshmark didnโt adequately notify its users. Some received an email but I NEVER did. I found out through Merc. The $600 threshold applies to the tax year, just like your taxable annual income. So it starts in January & ends in December.
luckyladybug4u
@multarjr Thank you dear, you are a wealth of knowledge! ๐๐๐
thewalkencloset
@luckyladybug4u just trying to help where I can. Iโm sorry to see you and others leave but itโs totally understandable. I wish you the best! Take care. ๐
luckyladybug4u
@multarjr ๐ฅฐ๐ฅฐ๐ฅฐ๐ฅฐ
carolsmith436
Wow!!!thank you for sharing!! I had absolutely no idea ๐คจ๐ง๐โน๏ธ๐ฅบ
thewalkencloset
@carolsmith436 itโs crazy how many people donโt know about this. Most people donโt find out until they make a sale that puts them over $600 and they get a prompt from the app asking for a SSN before they can print a shipping label. Itโs ridiculous that PM hasnโt been more open about thisโฆmost likely because they want to avoid a mass exodus of sellers and therefore, loss of profit (especially since theyโre publicly traded now).
kimtomko
I donโt sell a lot, mostly inexpensive items. I just hit the $600 mark for taxes. I had no idea this was a thing. If I cancel that sale and put my closet on hold will I be able to avoid this tax?
thewalkencloset
@kimtomko ugh, Iโm so sorry youโre just finding out about this. First, download your sales report and make sure you werenโt over the $600 threshold prior to this last sale. But generally speaking, yes. If you cancel this last sale that triggered the notification to enter your SSN, then you SHOULD be able to avoid taxes.
kimtomko
@multarjr thank you. This is insane. Just a little hobby and a little more spending money for me. Any idea if this will continue for 2023?
thewalkencloset
@kimtomko I know, it sucks. Unless Congress repeals the American Rescue Act, passed in 2021, it will go into 2023 and beyond. ๐
kimtomko
@multarjr sorry one more questionโฆ.will I be taxed on all of my sales for the year or just the sales that exceed the $600 mark?
thewalkencloset
@kimtomko I believe itโs all sales for the tax year if you exceed $600. This MAY include being taxed on shipping and canceled orders! Which is insane if thatโs the case. Poshmark has failed to clarify that but check your sales report. But this is why I block people who cancel orders without explanationโcanceled orders as to my tax liability despite NOT MAKING ANYTHING on the canceled sales. Itโs not right.
kimtomko
@multarjr thanks so much!
yvetteyvetteyve
Does any one know if it does include cancelled orders for sure? I am there and I am like what I am not putting my s s n online that's crazy sorry. I may be done then after this or at least for the year but if its this complicated then yeah permanently.
thewalkencloset
@yvetteyvetteyve I donโt THINK so but Iโm not certain. Iโve come to this conclusion that if the sales report is to be used for accounting purposes and itโs doesnโt include canceled orders, then it shouldnโt apply to canceled orders. It has a column of net earnings after shipping discounts & Poshmark fees. That SHOULD be the only taxable amount. I have to look into it on IRS.gov.
yvetteyvetteyve
@multarjr I agree but poshmark says gross on the website which is crazy! they are asking for my s s n and I am closing shop and canceled the order sorry ain't worth it after their fees and now govie fees?! insane
thewalkencloset
@kbodette ok, what a pain in the ___! Technically, yes, canceled orders count as taxable income. If the transaction occurred, even if refunded, it counts as income. SO YES, WE HAVE TO PAY INCOME TAX ON CANCELED ORDERS THEN DEDUCT IT AS AN EXPENSE AT TAX TIME.
yvetteyvetteyve
@kbodette I canceled the order too. I was not going to mess with that. found a statement on Posh website saying its gross earnings that INCLUDE shipping, sales tax and posh fees. So it's really you can as a regular old person selling their used clothes only sell 400 a year net.
yvetteyvetteyve
@kbodette I am not going to work so hard to post take photos, deal with questions, offers and crazy price cutter types then have to pay another slice for tax es you know. nope at 400 I guess I am shutting down. I think it's all crazy. And it's 600 for all sites and accounts. I don't sell anywhere else bit that also makes it insane.
thewalkencloset
@yvetteyvetteyve I completely understand and agree with you. They only way to get this back to a $20k threshold is to write to your congressman. All of this was changed in the American Rescue Act, passed by Congress is 2021. I am beginning to contemplate organizing an effort to raise awareness of this issue for small sellers to Congress. Try to have it repealed. Otherwise, it will never change.
kelmccue
@multarjr i donโt understand how a canceled transaction counts when no funds were received?
thewalkencloset
@kelmccue thatโs the way our โwonderfulโ IRS works. ๐ If the transaction goes through, according to the IRS, you have to write off the refund as an expense. Like I said earlier in the comments, they donโt recognize it upfront in hopes that you donโt deduct it when you do your taxes for the year. What makes me mad is how they can justify the threshold of $600 from $20,000! They did it to get more sellers on the hook to rake in more tax dollars.
thewalkencloset
@kelmccue hereโs some hope that it will change back to the $20k threshold: https://www.accountingtoday.com/news/congress-may-raise-1099-k-reporting-threshold-in-tax-extenders-package
thewalkencloset
@kelmccue not only will we be on the hook for income on the 1099-K for selling but we may also be on the hook for an additional self-employment tax! ๐คฌ Read this article & click the โsolepreneurโ link for self-employment. https://turbotax.intuit.com/tax-tips/irs-tax-forms/form-1099-k-decoded-for-the-self-employed/L6xHSTXwR
sarahs567
Thank you for replying to my text!! So upset!!
thewalkencloset
@sarahs567 of course! I wish I had better news to share. ๐ Iโm not looking forward to tax time, especially since I grew my boutique a lot this year.
sarahs567
@thewalkencloset I feel bad for you and sad too for all of us. Just trying to declutter and have extra money for the rising costs of everything. Thank you so much for your help โค๏ธ. At this point it doesnโt pay to shut down. But not sure if after December 31 if I will continue ๐ฅฒ
thewalkencloset
@sarahs567 I completely agree with you. Itโs ridiculous that we should be taxed on stuff that we already bought & just looking to rehome. Itโs a catch-all tax that includes those who donโt typically use accountants; therefore, overpay on their taxes. And with 80k IRS agents coming our way, audits will increase. I hate it.
fashionably_flo
Thank you so much for posting all this great info.
kdenton7
@thewalkencloset This just happened to me - so if I canceled the sale that put me over the threshold immediately after being notified, it's already too late and I still need to provide my tax info?? And which line on the sales report is the actual gross income? Do we have to add in sales tax and shipping paid by the buyer, too? Thank you for all this great discussion!!
thewalkencloset
@kdenton7 you should be Ok if you canceled the order. If you didnโt submit your SSN, they canโt send you a 1099K. The sales report doesnโt give you the info needed for tax purposes, believe it or not. The 1099K will be gross income that WILL include Poshmark fees, shipping costs, sales tax, refunds, and canceled orders. Ask of these would have to be written off as expenses at tax time. If theyโre not written off, then you run the risk of grossly overpaying on your taxes.
thewalkencloset
@kdenton7 all*, not ask.
kdenton7
@thewalkencloset Oh myyy. Considering the addition of shipping fees, etc. I don't understand how I didn't go above the $600 and get the request for tax info way sooner!! How ridiculously unhelpful of them. Thank you again for sharing all you've learned ๐
thewalkencloset
@kdenton7 of course! Glad I can help. I would close your closet until 1/1/23 to prevent sales for the rest of the year.
thewalkencloset
@kdenton7 ha! You already did. ๐
kdenton7
@thewalkencloset Oh yeah, shut all down as I try to figure what the hell is going on! Curious to see how they'll respond to the questions I submitted to Support ๐
I'll share anything useful I might learn!!
thewalkencloset
@kdenton7 Support will most likely unhelpful, as they have been in the past. Theyโll point you to their FAQs or support page which just says general stuff and suggest to speak to an accountant. Poshmark hasnโt been very open about the matter, hence my post. ๐
vlc823
@thewalkencloset I am also closing
thewalkencloset
@vlc823 Iโm sorry to see that. If you want, you can reopen after 1/1/23 , make a few sales and close again before hitting $600. I wish you the best.
clean4cash
@thewalkencloset E has done it or a few yrs now. Just another way of them making debt slaves to the e lites!! ๐ก
thewalkencloset
@clean4cash exactly.
clean4cash
@luckyladybug4u just start adding things up, like ink/paper for your printer, tape, all shipping needs. You can use a portion of your internet, cell phone bills, anything you use to sell your items. It adds up pretty fast and your deductions usually come close to what you made from selling.๐๐ป๐๐ป
clean4cash
Donโt worry about the shipping, itโs a write off. You may want to find a small /home business accountant. Ask your friends, everyone knows someone whoโs an accountant! Iโve used mine for years and her fees are a write off as well. Saves me from the headaches of doing it right. Plus they let you know if thereโs other things you can use towards your deductions.
clean4cash
@thewalkencloset here is a letter E has put together that sellers can send to their senators. It will need to be split up due to the max character requirements. I will put it in sections so anyone can screen shot it and send to their respective senators.
clean4cash
Subject:
Fix Burdensome Tax Reporting Requirements Before January 1, 2023!
Dear Sen. _______:
Millions of Americans will receive confusing and burdensome tax forms in January 2023 for the sale of used or pre-owned goods, even when the sale of those goods are non-taxable events, unless Congress provides critical relief before the end of this year.
clean4cash
With inflation continuing, consumer prices rising and millions of Americans struggling to get by, Congress must fix this issue in an end-of-the-year bipartisan tax package.
Millions of Americans use marketplace platforms to supplement income, make ends meet, and support their families.
clean4cash
Section 9674 of the 2021 American Rescue Plan (H.R. 1319), which was inserted without any hearing or debate, reduced the de minimis reporting threshold for Third-Party Settlement Organizations (TPSOs) from $20,000 in annual payments and 200 transactions, to $600 (with no transaction count). The impact of this change will be that millions of Americans cleaning out their garage or selling a few used items to make extra money will now receive a 1099-K tax form
clean4cash
Dropping the de minimis threshold to $600 for issuing a 1099-K will cause confusion and over-reporting of non-taxable income for millions of Americans already struggling as a result of the pandemic. Additionally, this change threatens to limit the availability of lower-cost used goods for essential items American families need.
clean4cash
When you sell a good below the cost you originally paid, there is no profit and therefore no income tax owed. If youโre one of the millions of Americans who use marketplaces as the virtual equivalent of a yard sale, youโll now have to make sure you have receipts for virtually everything lying around your house. From prom dresses to old electronics to used sports equipment -
clean4cash
if you sell even a single item for more than $600 dollars online, youโll now get a tax form, and need to be able to prove to the IRS that you did not make a profit. Americans shouldnโt be forced to choose between making money on used goods and facing the IRS.
Weโve seen how difficult it is for the IRS to process Americansโ returns on time.
clean4cash
Adding tens of millions of forms for non-taxable income is unnecessary waste, and a burden neither the IRS nor taxpayers can afford right now.
Fortunately, there are multiple pieces of legislation introduced by both Democrats and Republicans that will raise the reporting threshold and protect Americans selling online (S.3840/H.R.7079, S.3546/H.R.6913, S.948/H.R.3425).
clean4cash
I ask you to cosponsor this legislation and raise the threshold before January 1, 2023.
We need a threshold for consumer sales of goods that makes sense and protects millions of Americans from overtaxation and unnecessary disclosure of private information. Please protect consumers and increase the 1099-K reporting threshold.
Sincerely,
clean4cash
I hope this helps someone! People can screen shot my comments and then put them together in something like a collage or leave me their email here and I will email them the letter in full!
Everyone needs to do their part and SPEAK OUT in order for them to even consider changes!
thewalkencloset
@clean4cash thank you so much for providing the letter. People can copy and paste the text via a computer. Unfortunately, it will fall on deaf ears in my congressional district with Jamila Payapal as my congresswoman and Patty Murray s my senator. Iโve already reached out to Murray about this issue. But Iโll send in the letter nonetheless. Thank you.
clean4cash
@thewalkencloset yes but we need to! Patty Murray is who came up for me as well. I still think they cheated in our state. That evil one has been taking up space for far too long, 30YEARS is such B.S.
Iโm on the east side of the state! Where are you?
thewalkencloset
@clean4cash I hear you. I voted for Tiffany Smiley even though I felt it was futile. I hope she runs against Cantwell in 2024. Iโm in Seattle. Where in the east side of the state are you? My dad is in Richland where itโs more sane.
clean4cash
@thewalkencloset Us too and she wasnโt that far behind Patty. Weโre in Spokane. We canโt give up tho, I think more ppl voted for Tiffany that we think. Same for InSleeze!! Our house needs to be cleaned EXTREMELY BADLY!! I created a post off of yours but added pics of the letter if anyone wants to go there to save those pics.
allie3210
I just found this out today when I had to enter my SSN in order to download a shipping label. I'm pretty annoyed with having to enter private information online! I'll be pulling any remaining items in my closet and find alternative methods to sell my already paid for (including taxed) items. Arrghhhh!
thewalkencloset
@allie3210 almost a year later and people are still learning about this. Poshmark has done a horrible job in alerting their users but that wouldโve gone against their own self-interests. Iโm so sorry. Again, another beautiful closet closing up. The only way it changes is if Congress changes it. Clean4Cash provided a letter in several parts in the comments that you can send to your representatives. Take care in 2023.
nikki_choi
@kdenton7 Hi! i am curious about your situation. Did you cancel the sale that put you over the threshold? That way you didn't need to enter in SSN? I am in a similar situation, let me know, thanks!
kdenton7
@nikki_choi Hi! This is what I hoped to do, but apparently canceled sales still contribute, as well other things I was surprised by. So I'm assuming it's too late, even if the order is canceled. I actually would have surpassed the threshold awhile ago, to which Posh responded that the notification can come at any time. Also unhelpful is the fact that they don't track this in their reports.
kdenton7
@nikki_choi I submitted my SSN but still closed my shop just to wait and see how things play out. I still don't feel confident in understanding exactly how to add things up, ha!
Here's their response to me:
"We are sorry that our system missed your notification when you initially reached the threshold. Even though the notification was missed, it can be triggered at any time after the $600 threshold is passed...
kdenton7
@nikki_choi "As previously stated, the $600 gross sales threshold for the calendar year includes cancelled orders, fees, shipping costs, sales tax, and refunds At this time, we do not issue gross sales reports...
kdenton7
@nikki_choi I
"In the meantime, the best suggestion would be to use the order price, shipping discount, and sales tax columns on your My Sales Report to try and estimate this number. Please keep in mind that the shipping price on Poshmark is a flat $7.45 for all orders unless a shipping discount is offered."
So helpful. ๐
nikki_choi
@kdenton7 Aww ok, this sucks! Thanks for letting me know! Appreciate it!
nikki_choi
@kdenton7 so annoying! Not helpful at all!!!
nikki_choi
Thanks for sharing all this info!!
nikki_choi
You are so helpful! Appreciate it!! :)
itslurock
Thank you for this info. I signed up for Poshmark beginning of this year. Had a PS5 sold over $600 but the buyer/transaction seemed sketchy so it was cancelled with a few hours. Poshmark has been repeatedly reaching out for my personal information for that tax bs even though the transaction was cancelled. I havenโt submitted anything as of yet to Poshmark but itโs looking like I will have to.
itslurock
@kelmccue thatโs exactly what Iโm dealing with right now. Signed up top of the year never used the app before and sold a ps5 console I had over $600 and cancelled it within just a few hours. Never sent anything out, never received payment and never used the app for anything else but have been getting ongoing emails and notifications asking for my SSN # for tax purposes. I think Iโm good on thatโฆ.
az148
So cancelled orders count as well?? Iโm hoping to cancel this new order so I donโt pass the threshold
thewalkencloset
@az148 canceled orders count. So as a warning: even if you cancel this order, it still might count! I recently read that even if you donโt submit your SSN, Poshmark can send an โunofficialโ 1099K to your address on file & youโd have to enter it for filing your taxes. ๐
az148
@thewalkencloset Thanks! are they going to suspend my account if i dont submit my SSN and cancel the order?
thewalkencloset
@az148 oh no, not at all. I know several people who have done that with no issues.
aimer1013
@az148 I tried to do that and they told me I am still over the 600 even though I am not. It Hass to be illegal to count money towards taxes that you didnโt even make. I am wondering if I close my store and do not sell the form if everything will reset January 1.
thewalkencloset
@aimer1013 unfortunately, counting canceled orders is not illegal. In fact, itโs in the IRS code. The refund becomes a write off/deduction when your file your taxes. Which is stupid because if you donโt, you ARE taxed on non-existent income; being taxed for nothing! The $600 tax threshold resets 1/1/2023 but sales made in 12/2022 that clear in January are counted towards 2023 tax year.
az148
@aimer1013 ugh agree 100% โฆI believe it should reset in the new year since the legislation accounts for one year
az148
@thewalkencloset Does the $600 threshold reset in Jan 2023 and I will be able to selll again without submitting my SSN? Right now Iโve cancelled the order that made surpass $600 for this year 2022
lilyyyflowerrr
@az148 yes, it will reset starting the new year. This is really annoying unfortunately. I hit $600 cuz people kindly ran my items on their live and so they save and bundle I cancelled orders and created new ones and now the cancelled ones count towards the $600 when really it wasnโt $600 on sales ๐ฃ I wish I knew before.
thewalkencloset
@az148 it does reset and you can sell again Tax-free prior to gross sales hitting $600 for 2023. But like I said before, you still might get a 1099K from Poshmark for 2022 even if they donโt have your SSN.
bubbles1971
Looks like they didn't get the threshold changed in latest bill like they talked about, dang, they should've pushed harder. But I read something about IRS was putting a hold on it for now for 2022- that figures! I quit selling in Jan at under $600, and could've been selling all year! Well atleast some people will get lucky. I hope Congress keeps wkg on getting the figure changed anyway on going so I can sell more in 2023, was looking forward to
bubbles1971
The Internal Revenue Service announced a delay in reporting thresholds for third-party settlement organizations set to take effect for the upcoming tax filing season. As a result of this delay, third-party settlement organizations will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower, $600 threshold amount enacted as part of the American Rescue Plan of 2021.
thewalkencloset
@bubbles1971 so are you saying we wonโt be getting 1099Ks from Poshmark for 2022?
bubbles1971
@thewalkencloset sounds like it, even if they get sent out by accident on platform , the IRS is going back to using $20k limit for last year and won't be countable reportable- man I wish I'd kept selling
thewalkencloset
@bubbles1971 I read a few articles about it. THANK GOODNESS. Hopefully it will be enough time to turn it over. Iโm sorry you lost out on income though!
thewalkencloset
@bubbles1971 thank you so much for this new update! Iโm sure it will be relief to many and a frustration to others like yourself. Iโm sorry.
bubbles1971
@thewalkencloset well I just hope Congress keeps on it and can get a new limit set for 2023 and soon so know what I can sell next year
rebshaw68
Yeah I have a concern. This absolutely sucks. Iโm not happy with the politicians at this point. I will definitely be contacting my congressman. Thank you.
hudsonvalleyzoo
Very informative. Thanks so much for all the effort you put into explaining the issue. ๐
thewalkencloset
@mixon4christ, @scralice, @solace_curated, @crystalg13, @stacybarrett465, @zoeserendipity, @luckyladybug4u, @carolsmith436, @kimtomko, @yvetteyvetteyve, @kelmccue, @sarahs567, @fashionably_flo, @kdenton7, @vlc823, @clean4cash, @allie3210, @nikki_choi, @itslurock, @az148, @aimer1013, @lilyyyflowerrr, @rebshaw68, @hudsonviews212 -------โโ PLEASE SEE UPDATE. @ TOP OF DESCRIPTION. --------
thewalkencloset
@mixon4christ @scralice @solace_curated @crystalg13 @stacybarrett465 @zoeserendipity @luckyladybug4u @carolsmith436 @kimtomko @yvetteyvetteyve @kelmccue @sarahs567 @fashionably_flo @kdenton7 @vlc823 @clean4cash @allie3210 @nikki_choi @itslurock @az148 @aimer1013 @lilyyyflowerrr @rebshaw68 @hudsonviews212 โโ PLEASE SEE UPDATE. @ TOP OF DESCRIPTION.
rebshaw68
Thank you and thank goodness.
itslurock
Great news! Thank you so much for the updated information. What a relief.
happygilmore13
@thewalkencloset thanks so much!!!
clean4cash
@thewalkencloset this is FABULOUS NEWS! Thank you so much for sharing this with us all! Merry Christmas!
az148
@thewalkencloset appreciate you sharing this!! I still have an order that hasnโt shipped but poshmark isnโt letting me print the label - do you think they will update their system to reflect the IRS news soon?
thewalkencloset
@az148 since Poshmark wasnโt very open with the change in tax policy to begin with, I donโt have much hope they will notify Poshers about the delay. My guess is that theyโll still require your SSN since itโs still in effect for 2023. Once you enter your SSN, you canโt delete it. But I would email Support to check. You may not hear back until sometime next week.
luckyladybug4u
@thewalkencloset Thank you sooooo much for sharing the info! How did you hear about it? This is obviously for the whole U.S., right? This IS for the selling year 2022, right? And yes, Poshmark really screwed up by never notifying us of the change to $600 selling for income tax. At least I never got notified. If it's true, it's a great Christmas gift! Thanks again dear ๐๐๐
thewalkencloset
@luckyladybug4u itโs all thanks to @bubbles1971 ! She let me know in the comments above. It applies to all who wouldโve fallen under this tax rule for 2022. It is a welcomed reprieve! Merry Christmas!
luckyladybug4u
@thewalkencloset Yes, Merry Christmas to you also ๐ Best gift Santa could give us sellers! ๐๐๐
pdkpt99
โThanks for the shares and for posting this tax information. Another platform initially contacted me regarding the $600 cutoff. I agree that PM has done a horrible job informing us. Wrote to Congress months ago and received no satisfactory reply. Itโs actually a double tax. Pay when you buy the merchandise and pay when you sell! Ridiculous!โ
kimtomko
Thank you so much for the update! Great news!
mam909
I personally no longer trust Poshmark & will be deleting my account. How can they count a cancelled order? Much less US paying taxes on the portion Poshmark has taken out of our sale. One word..ILLEGAL.
thewalkencloset
@mam909 I completely understand how you feel. But policies, such as canceled orders, isnโt Poshmarkโs policy. Itโs the IRS! Yes, it should be illegal bc itโs a sneaky way to collect more taxes, in hopes you donโt deduct the refund as an expense. Itโs the govt you need to be mad at. It was added to the Biden Adminโs American Rescue Act passed in 2021. So much for no new taxes on income under $400k! ๐ก
thewalkencloset
@mam909 See my update on top of the description though. At least some good news for now & hopefully later, theyโll change it back permanently.
thewalkencloset
@kimtomko much welcomed news but Congress needs to reverse it permanently. Make sure to write to your representatives! We need to pressure them. Thereโs a letter template provided throughout several comments above. It was provided by @clean4cash (thank you!) and it begins with her comment on Nov. 22 at 12:25 pm.
thewalkencloset
@pdkpt99 it certainly can be a double tax if youโre not tracking EVERY DETAIL! And if youโre not โa businessโ but just a regular Posher trying to get rid of stuff, youโre not tracking those details! Who would? You should ONLY pay taxes on sales where you made a profit (made more than what you paid for it). But this requires to keep every dang receipt! Since most of us donโt do that, yes, itโs a double tax.
caliklassic
Amazing, thank you for posting this!!! ๐ฅ
thewalkencloset
@caliklassic youโre welcome! Youโll find more info shared throughout the comments as well. Fingers crossed that Congress will reverse it altogether.
caliklassic
@thewalkencloset ๐ฏ!!! So wonderful of you to start this thread! My municipality requires a business certificate as well if weโre taxed, so itโs out of control!!!
thewalkencloset
@caliklassic thatโs crazy! Actually, I should check on that because I wouldnโt doubt Seattle would do the same. I just want this to go away.
caliklassic
@thewalkencloset Omigosh me tooooo! My CPA told me everyone in their field is completely up in arms about the ridiculousness of it. First time Iโve ever seen my even-keel accountant emotional! ๐ Hereโs what San Diego requires in case youโre curious: https://www.sandiego.gov/treasurer/taxesfees/btax/btaxhow
I used to live in Seattle - such a gorgeous place with incredible food. Yum!! I had the best hair stylist there that Iโve ever found anywhere in case youโre ever looking!
thewalkencloset
@caliklassic EVERYONE is up in arms over this new threshold. The IRS claims itโs to give time to clarify to taxpayers, but in reality, theyโre under a lot of pressure to change it. Seattle is great. Been here 20 yearsโฆtoday, actually!! Ready to get out off this crazy city. And Iโm totally on the hunt for a new hair stylist! Mine keep leaving! I need to cut my pandemic hair! Haha!
caliklassic
@thewalkencloset ๐ฏ!!! Well, Iโm certainly glad youโre so clued in! I was in the dark until I saw a Posher like you post a listing about it early this year and hadnโt heard the update. Truly appreciate you helping all of us help ourselves by sharing your intel! Your listing made my year!! For hair, couldnโt more highly recommend Devan White at Shine in the Market (right outside Pike Place) if sheโs still thereโฆ
thewalkencloset
@caliklassic I only found out a year ago when M E R C A R I sent a notification saying that I sell $600+, I need to submit my SSN. I was like, โWhat? Why?โ and looked it up. Poshmark didnโt ever send me anything about it until they required my SSN to print a shipping label last January. And thanks for the recommendation! Iโll definitely check her out! ๐
caliklassic
Yeah, what is UP with that?! I was reading some about that in the thread. Posh doesnโt post detailed info on its site - about anything, frankly - and they never directly answer questions when I email! Good on M and e for being clear and forthright!! I was baffled when I saw a Posherโs post about this early on. NOT cool we have to find out from other platforms and each other!
caliklassic
And you are soooo welcome! Hope the recommendation works and you do something special for yourself on for your 20th anniversary today!! ๐ฅณ
caliklassic
Really phenomenal info in here from @thewalkencloset @bubbles1971 @clean4cash!!! Thank you for all your hard work, research and generosity in sharing your intel. Do any of know if we can get Posh to allow us to delete our SSNs now that they donโt need it for us everyday people who were just trying to make a little ๐ต???
clean4cash
@caliklassic idk, canโt hurt to ask! Iโm sure weโd all be happy to have them delete them!
caliklassic
@clean4cash Iโll email and see if I can get a helpful response, or even any response!
clean4cash
@caliklassic awesome! Thank you, do share what you learn!
caliklassic
@clean4cash ๐ฏ!!!! Thank YOU! I absolutely will.
clean4cash
@caliklassic haha, I went in to see if I could delete it and nope, that didnโt work. ๐๐ป
thewalkencloset
@caliklassic @clean4cash sorry for the delay. I was reviewing reported listings for Poshmark. I tried a few weeks ago to delete my SSN and I canโt. I doubt they will let you delete it after youโve submitted it, since at this time, the $600 threshold applies to 2023. Why would they delete it now then chase after you to resubmit it later? So I donโt think they will. ๐
clean4cash
@thewalkencloset yep Iโm sure youโre right. BUT it canโt hurt to ask! I canโt image making 20k year! ๐คฃ๐๐คฃ It would be nice, most of us here are just cleaning out our closets hoping to get enough to restock our closets or for gifts! Iโm just glad it is staying at 600! Happy sales ladies! Make it a great yearโฆ just under 20k! ๐๐๐๐
caliklassic
@thewalkencloset That wouldnโt surprise me. :/ Iโm sure your right. I made my case earlier and will see what they say!
caliklassic
*youโre right
caliklassic
@clean4cash Hey, if I can make it to 20K, Iโll keep on going ๐๐คฉ
caliklassic
@clean4cash Me too ๐คฃ ๐คฆ๐ปโโ๏ธ ๐
๐ปโโ๏ธ
thewalkencloset
@caliklassic @clean4cash right?! If I can clear 20k in sales a year, Iโll deal with the tax issue! But for $600?! Hell no.
caliklassic
I guess I hoped Posh would give us the option to delete since itโs no longer required, but who knows what theyโre legally bound to do vs do as goodwill
clean4cash
@thewalkencloset yes, ladies yโall are so right! $600 is just ridiculously low for cleaning out our closets. Heck, very little makes it to my bank to begin with.๐คฃ๐๐คฃ๐คช๐๐
caliklassic
@clean4cash I was in danger of being in the red with all the fees my city and state were going to charge me plus late fees for not knowing about the fees that had to be paid ๐คฏ
caliklassic
@thewalkencloset HELL ๐ซ!!! I kept going at the urging of my accountant to โsell as much as possibleโ since I didnโt know about the taxes until after I crossed the threshold, like so many others here!
caliklassic
@clean4cash Same!! I keep finding so many listings on here for items I never knew I needed ๐ซฃ ๐
845collections
Thank you for posting this!! Happy New Year!
379_vintage
well, this really sucks, I haven't been on here for a few years, I heard about it a while back but forgot so thanks for posting... reconsidering if I will even bother with this now... that's a lot of hassle on top of what is already a huge hassle just for a little extra income.
benjibargainbin
Supposedly this will be overturned and the OG 20k rule will be added back. Watch ClearValues recent video on YouTube covering this, he knows his stuff.
thewalkencloset
@charismabc I hope youโre right! Iโll check it out. Thank you!
thewalkencloset
@cutiebearaa they still request it because the $600 threshold still applies to 2023, unless repealed.
jensthriftique
Iโm unable to print my label now still in 2023 without providing my social! This is wrong !
caliklassic
@thewalkencloset Spot on!!! Just heard back from Posh on whether we will be allowed to remove our SSN. Will break up into messages due to character count.
caliklassic
Thanks for getting in touch! We are aware of the IRS announcement and we are working to confirm the interpretation of the recently issued guidance before the filing deadline. In the mean time, we will continue to collect the required information. We can assure you that we will only report to the IRS what is required by their guidance for 2022.
caliklassic
We will be sharing more information in the coming weeks once we have a clearer understanding of how this impacts our seller community. We appreciate your patience and cooperation during this time.
caliklassic
@clean4cash Doesn't answer the question I asked but at least it's a reply from Posh!
thewalkencloset
@caliklassic awesome! Thank you for sharing this. Itโs more than I wouldโve expected but certainly less than whatโs needed. Frankly, I donโt see anything changing other than we wonโt be seeing 1099-K forms in the mail for 2022. Which IS a big deal but SSNs will still be requested.
caliklassic
@thewalkencloset Youโre so welcome! Just happy I could contribute to the conversation. Thank YOU for providing this forum and so much of your own time to assist this awesome community!! ๐ฅฐ
thewalkencloset
@caliklassic aww, youโre so sweet! I only started this because I know how much it would affect other sellers here. I just wanted to inform people since Poshmark did a poor job of doing so. Cutiebearaa posted some info that Iโm going to link in my next comment.
thewalkencloset
@caliklassic Iโm sorry, charismabc posted it. Iโll share.
thewalkencloset
@charismabc thank you! Iโm posting a link to a video I found from him. To other Poshers: copy and paste from your computer: New IRS $600 Tax Rule Explained https://youtu.be/92sX4kS5XNQ
caliklassic
@thewalkencloset ๐๐คฉ๐
clean4cash
@caliklassic Iโm sorry, Iโm not finding the question that you asked me but Iโm not finding. I am glad someone was able to get you and answer.
caliklassic
@clean4cash So sorry for the confusion! I meant Posh didnโt answer the question I asked THEM about whether we can remove our SSN. I know you were curious too and asked me to let you know what they said. You are great! ๐โค๏ธ
caliklassic
@clean4cash I see how my comment wasnโt clear, apologies! ๐
clean4cash
@caliklassic ๐คฃ๐คฃ๐ then I reread my response ๐คฆ๐ผโโ๏ธ sorry I had just woke up. Iโm glad it all good either way.
Reading thru this all is ๐คฏ๐คฏโ๏ธ Iโm getting an appt with my accountant!
caliklassic
@clean4cash All good! ๐ฏ๐คฃ
thewalkencloset
@stud_stuff yes, I posted that updated 12.23.22 in the description. Thank you for contributing! ๐
lookather
I have got to share this with my followers.
Good to know info AND well written.
Thanks ALOT๐๐
thewalkencloset
@lookather thank you! The more you know! ๐ซ ๐ I love your closet! ๐
lookather
@thewalkencloset Thank you and many blessings for you to have a MARVELOUS New Year!
hiendmerch
15 year experience tax consultant here. Thanks for posting this! Happy to answer any questions.
americausa1213
@thewalkencloset Hi Iโm new to Poshmark! Do you when they send out 1099K form or when it will be available to Download, like what date on January ?? Thanks so much and have a great day!
thewalkencloset
@americausa1213 first, welcome to Poshmark! ๐ No one should receive a 1099-K form for 2022 because the IRS has delayed it a year (see my update at the top of the description). In addition, youโd only receive one if you make +$600 in the tax year. Youโll find lots of info throughout the comments as well. I wish you success with Poshmark this year but track all of your expenses & receipts.
thewalkencloset
@hiendmerch thank you for jumping in, offering your expertise! My question: my household is at a higher risk of an audit because my husband is self employed. I donโt have many receipts for things Iโm selling that Iโve owned for years. Ex: I bought a sweater 10+ years ago for $60 (donโt have the receipt anymore). I sell for $20 & I deduct that income from my gross reported on the form. What happens during an audit?
americausa1213
@thewalkencloset Thank you so much for responding! I started selling on May 2022 and yes I have over $600. How does it work, do I have to request the 1099K or they will automatically send me one? I already selected electronic download and do you know the exact date on January Poshmark start sending out form 1099K. Thanks again
thewalkencloset
@americausa1213 if youโve sold more then $600, you have submitted your SSN to Poshmark already. You do not have to anything else. Poshmark wonโt be sending the form at all this January for 2022 because the IRS delayed it one year. However, if you sell +$600 in 2023, as of now, youโll automatically receive a 1099-K sometime in January 2024 via download. You so not need to request it. Exact date in 2024 is unknown.
thewalkencloset
@americausa1213 *do* not need to request it.
americausa1213
@thewalkencloset Thank you so much! I was a little concerned about it, now I got it ๐
Have a blessed day!
alycerancour
Lots of poshers stopped selling because of this! Itโs pathetic that this regime government of idiots are aloud to tax people for selling used items which have already been taxedโฆhonestly itโs sad but Honestly I have a great accountant so I pay THEE LEAST AMOUNT Due TO THE FACTS ITS EXPENSIVE TO RUN S TINY BUSINESSโฆ Good Luck everyone I hope you all can stay in business! I love Poshmark the people ARE awesome!
sondrabydesign
It would happen now, I am just getting over illness and injuries to the point where I was going to start putting the rest of my too large clothes on Posh and now this happens, I am too old to run a business again, how do I close my closet temporarily so no one can buy until I see how this is going to go? I paid income tax on the money I bought these things with and now they want me to pay it again, isnโt this one of the reasons we separated from England, taxes on top of taxes?
bubbles1971
@sondrabydesign Account settings/vacation hold and put a date-
bubbles1971
I haven't seen anything recent on if Congress if still working on repealing or raising limit for 2023 sales- wish they'd hurry or I'll have to shut down again soon๐.
I feel like they've forgotten or it's on back burner since IRS stepped in & delayed, but do they not realize we need to know what/how much we can sell right now!
bohemiandreams2
@bubbles1971 They did put it on the site months prior to it happening they gave us plenty of time to be prepared but for new sellers that don't know it's not fair but that's uncle sam
bohemiandreams2
@alycerancour I have a great tax worker too so luckily it evens out just remember she can count gas wifi phone bill electric bill car payment everything you could possibly use for sales on here down to printer paper bags boxes monthly
alycerancour
@bohemiandreams2 exactly ๐
bubbles1971
@bohemiandreams2 yes I did know about it last year Posh emailed me and I closed my closet rest of 22. What I am talking about is Congress needs to hurry and change it for this year 2023 so know if I can keep selling or not past $600
msstinks
Sad hope they fix back to 20k - We shouldnโt be responsible for the The American Rescue Plan Act of 2021, also called the COVID-19 Stimulus Package or American Rescue Plan US$1.9 their mess they need to fix & not take from small businesses.
thewalkencloset
@cutiebearaa Poshmark will send a request to you to enter your SSN once you hit the $600 threshold for 2023. It usually happens once youโve made the sale that puts you over, you go to print the shipping label but canโt until youโve entered your SSN.
spowers888
@thewalkencloset @hiendmerch Hi there, Iโm hoping you can help answer my question- so, I sold a few things on PM that were used personal property this year. The sales went over the $600 threshold (10 transactions; $3300 gross- huge loss on what I originally paid for everything; I have receipts just in case). Based on the update from the IRS, I would not be getting a 1099K for the 2022 year because I did not gross $20,000 or have 200 transactions.
spowers888
@thewalkencloset @hiendmerch However, when I contacted Poshmark earlier this week concerning when I would be receiving my 1099K electronically (I didnโt know about the update from the IRS yet), a Poshmark rep advised I would be receiving one in the coming weeks. Is this misinformation on Poshmarkโs part? I want to file my taxes, but donโt want to end up needing to amend if this stupid form actually shows up for 2022. Any information you can provide would be great! Thank you!
thequeenlife
@thewalkencloset hi! I just want to clarify that I do or do mot have to pay taxes on the sale of my items in my closet from Jan 1 - Dec 31 of 2022?
thewalkencloset
@thequeenlife you do not. The IRS delayed it one year and I hope Congress manages to overturn it altogether before the end of this year. ๐ค
thequeenlife
@thewalkencloset What a relief to know this! Thank you so much for the info! I donโt know exactly how many transactions I had in 2022 โ probably around 200. If they delayed it for 2022 sales, that saves me from searching for all receipts, figuring up my mileage every time I drive to the PO, the light & dressform I bought for photographing, ribbon, tissue, wrapping paper, cards, etcโฆ All this & more add up to a lot of expenses that would need to be deducted before any profit could be determined.
byvytran
Hi! Thank you so much for the updates! I have a question. What if you resell items from friends/family donation, or a gift someone gave to you. How do we have the receipts for those items to file taxes? Thank you!!
thewalkencloset
@byvytran good question. Iโm not a CPA but what I do know is that anything you sell, will be reported as gross income in the 1099-K. Ideally, weโd have receipts for everything that we ever sell but we donโt, especially gifts. Iโve basically asked that question here a few weeks ago & I havenโt received a response from the CPA who commented. I know you can claim gifts but Iโm not sure how it works in this situation where you then sold them.
bubbles1971
Yay! They are still wkg on it:
January 24th 2023-
"GOP reintroduces bill to end IRS mandate that Americans report digital transactions over $600"
"Republicans continue their effort to impede the federal government from auditing certain digital transactions.
New legislation that would stop the IRS from "snooping" on Americans' financial transactions, ones over $600 on digital platforms like **** and , has reportedly been reintroduced in the new Congress"
thewalkencloset
@bubbles1971 fingers crossed that it passes!
erod351
Thank you so much for this. I did not know about the canceled orders thing.
cyndidawn
does anyoe know if you can locate your cancelled sales/returns somewhere on your sales report or within poshmark with out having to manually go thru each sale?
threadthepast
@thewalkencloset if they delayed the rule for 2022, why did Poshmark still send me a 1099K I wonder? Iโm confused. Do I still need to claim this now that the rules have changed? Anybody know? I canโt get an answer, ugh. I am under 20,000
thewalkencloset
@cyndidawn Iโm not aware of an easy way to do it other then manually by sorting columns in an excel spreadsheet.
thewalkencloset
@threadthepast Poshmark sent you a 1099-K for 2022?? The IRS did delay it a year. But I would check with an accountant or email Poshmark support for clarification. Please share any info you might learn. This is a first I heard of a 1099-K sent out by Poshmark. Can you confirm itโs from Poshmark?
threadthepast
@thewalkencloset so I guess itโs based on the state I live in! VA has a reporting amount of 600$??? Iโm concerned and confused because the amount on my 1099k is way off from my earnings on my sales report. I donโt think it will be profitable for me anymore. Iโm sad!
thewalkencloset
@threadthepast If itโs higher than your earnings itโs because itโs your gross earnings. It includes canceled orders, shipping, taxes paid by the buyer, sales fees, and perhaps other stuff. All of those things I mentioned, youโll need to deduct from that gross total. Also deduct any losses on items you sold below what you paid for them. Again, check with an accountant if you need to do this for 2022. You shouldnโt be required to by VA or federal.
threadthepast
@thewalkencloset Really? Iโve been so stressed over all this. Iโve been waiting to hear from Poshmark. I am looking for an accountant now. Thank you for responses! This has been very helpful! You have literally been the only person to give me any feedback. Just that information on why my 1099k amounts varies from my net sales helps ease my mind so much, so thank you!!! ๐I wish poshmark would just give you a more user friendly sales report; itโs a lot to sort through.
thewalkencloset
@threadthepast youโre very welcome. ๐ I honestly donโt believe you have to worry about the 2022 1099-K but best to check with an accountant. I havenโt received anything myself but I did get my yearly W2 already. Poshmark really does need to work on those reports. I just attended a Live Posh Party a couple weeks ago & had the ears of a couple execs there. Iโll mention the reports at the next show.
thewalkencloset
@threadthepast I love the variety of your closet! Beautifully curated! I also grew up in VA. I went to JMU. Itโs still home but I donโt miss the state income tax! ๐
destinymack46
@thewalkencloset I am so confused by all of this. So Iโm 2022 I made over $1200. So I donโt have to wait for them to send me a 1099K form then???
thewalkencloset
@destinymack46 the IRS has delayed the lower threshold of $600 for reporting until 2023. So you shouldnโt be getting one of 2022. If you do, check with an accountant.
susanbb23
Hi, I had about this, however, you explained this subject much clearer! Thank you! โค๏ธ๐๏ธ๐
hpeldridge
Thanks so much for sharing this information. I really appreciate it because I know you took valuable time to look it up and then type it out for
the rest of us. Thanks again!!!!
pearlsbowtique
omg im so dreading this entire process. im behind on filing for last year and year prior. i dont have a clue. this is nuts!
thewalkencloset
@pearlsbowtique I am too! No one is ready for this unless your spray open and run a small business. This is an undue burden on all of us.
pearlsbowtique
@thewalkencloset omg look at this feed! lol
pearlsbowtique
@thewalkencloset Thank you hun for the 411. I'd like to share this post with a friend if you don't mind. We are both clueless on this whole ordeal. ๐
pearlsbowtique
@panamarubia
bubbles1971
Ugh.., I got the dreaded notice- hit $600 already. I was debating closing, but thought what if they change it later this year and I wasted selling time again. Sure hope/pray it gets changed or I'm on the hook now๐ต๐
bubbles1971
@cutiebearaa I'm not sure, but since the limit went back to normal last year and shouldn't need/ask ssn for it now you would think 2023 would start fresh and they not ask til you hit $600 this yr
kellechinparis
@scralice is this over $600 in our total earnings or $600 sale prices even if you only keep like $483 of it after fees? Thanks!
thewalkencloset
@kellechinparis it includes everything: sale price, sales tax, fees, canceled orders, shipping. You have to deduct all those things when you submit your taxes. Itโs a pain. But the $600 includes more then just what you pocket.
sustainablermx
@k_mainguy
k_mainguy
@jfrost75
tammyreneealsob
Yes I just cancelled an order I was selling for 610.00 Now that I cancelled and hoped to go back and sell for 599.00 PM says they will 1099 me for both amounts. Is this right ? i have only sold one items on PM years ago so I dont know the rules now at all.
I am going to just keep the dang necklace .
Not paying income tax in this item.
thewalkencloset
@tammyreneealsob that is correct because the 1099 includes canceled orders. You might as well sell it now. The only portion you pay taxes on is on the difference between the what you paid for it and what you made in the sale. When submitting your taxes, deduct the shipping, sales tax paid by the buyer and all canceled orders. Then deduct the amount you paid (IRS will require receipts if audited) and thatโs what you pay taxes on.
tammyreneealsob
what does that mean i pay difference between what I paid for it. Then what I sell it for. You mean the Tiffany retail price is $ 1,150.00 and selling for $ 599.00
Please clarify thanka Tam
thewalkencloset
@tammyreneealsob sorry I wasnโt more clear. You pay taxes on what you paid, not retail value, but what you actually paid for it yourself. So if it retailed for $1195 but you paid $1000, plus taxes and shipping if applicable, totaling $1100, and you sold it for $600, you owe taxes on $500. Hope that helps! ๐
tammyreneealsob
I am SELLING THE necklace. Not buying it
thewalkencloset
@tammyreneealsob I understand that. I know that. Please reread my last comment with the example. If you need more clarification, let me know.
tammyreneealsob
what I paid for it myself is confusing Say it was a gift 10 years ago and I sell it for 610.00 I pay income taxes on that amount LESS THE fees pm charges the shipping costs right ?
thewalkencloset
@tammyreneealsob on the surface, yes, youโre correct. However, Iโm not sure how the rules apply if it was a gift. Youโd have to talk to an accountant to see how income taxes are applied to a gift that was sold. My assumption is that your example comment is correct but again, best to ask an accountant.
lulusfringe
Thank You for sharing this ๐And your closet is beautiful!๐
thewalkencloset
@lulusfringe aww, thank you! Congrats on being a featured closet today! I loved your closet. โบ๏ธ
lulusfringe
@thewalkencloset
Awww! ๐ฅฐ๐TYSM!
That means so much to me๐
jscalabrino
so when I sell back an item bought at the store, does IRS reimburse me the sales tax? ๐ฌ
thewalkencloset
@jscalabrino technically? Yes! You deduct it along with the retail and shipping costs when you file your taxes. ๐
princessbrooks7
Hey, can you tell me how I can get a report that will include canceled orders? The report I printed for 2022 says nothing about them! Also, am I supposed to be writing off the $7.67 Poshmark Shipping because I didn't get that money. Plus, it's not on my 2022 Sales report. Any help is really appreciated!
thewalkencloset
@princessbrooks7 the sales report doesnโt include canceled orders unfortunately. Nor is there any report you can pull from Poshmark that would include it. You deduct the shipping and sales tax paid by the buyer. The only thing you must owe tax on is the profitโthe difference you paid for the item when you bought it and your profit from the sale. If you paid more on it when you bought it than what you made by the sale, you owe nothing.
princessbrooks7
thank you for getting back to me. But if there is no Cancelations or shipping in my report, how do I know what it is? I don't understand that.
thewalkencloset
@princessbrooks7 there is no easy way to do it other than to go through each sale under โMy Salesโ and create a spreadsheet or use something like Quickbooks. Poshmark needs to create a better sales report that reflects the changes in their usersโ tax liability. Iโm actually going to ping a couple sellers who are businesses and see how theyโve always done it.
princessbrooks7
@thewalkencloset thank you!
lovebirds212216
Hi ! I didnโt know and now I have to fill out 1099k. What are write offs that can be used? Can the following be used as write offs for 1099k: shipping supplies, home office, cancelled orders, Poshmark fees? Do you need to create a spread sheet for tax time or is there a way to print Poshmark fees/cancelled refunded orders to show prof for tax filing ? I appreciate you taking the time to writing all of this and informing myself as many others. Wish I knew before hand
thewalkencloset
@lovebirds212216 you shouldnโt have to do it for 2022. But if you did get one, the original threshold ($20K/200 transactions) apply. As for the remainder of your question, see the last few comments made starting 3/20. Yes, you can deduct all of that. However, Iโm not an accountant so it is best to consult one for the details. Remember, keep receipts FOR EVERYTHING deducted in case you ever get audited!
lovebirds212216
@thewalkencloset receipts to what the items sold? Many of the items were my personal thing I got as gifts or bought and sold for less then the value bought for. Itโs for 2023
thewalkencloset
@lovebirds212216 If you bought it and then sold it on Poshmark, even if you sold it for less than what you bought it for, youโll have to prove you paid more for it IF you are audited. As for gifts that your sold, I THINK the same goes for that too, but check with an accountant to be sure.
lovebirds212216
@thewalkencloset ok thank you. How do you print a sales report and have the cancelled orders as well as the fees, shipping taxes taken on a sale out to give to accountant for taxes ?
lovebirds212216
@thewalkencloset so this 600$ is new for 2023 it use to be 20k or 200 sales in 2022. Wow Uncle Sam take take take when we hardly make to survive
tammyabc
@malakea11
anniepapz
@thewalkencloset I am confused about the cancellation part. I cancelled an order that put me over the threshold. Since Iโve done that, the redemption history would show I only made under $600 for the year - can that be used to show I actually didnโt go over the $600 threshold? If Iโve only made $400?
thewalkencloset
@lovebirds212216 sorry I missed this. But the answer is not helpful: I donโt know. Either do it manually from your sales page into a spreadsheet/QBs or give your accountant access so they can do it. An accountant might have suggestions
thewalkencloset
@lovebirds212216 agreed. It sucks. It was changed in the American Rescue Act in 2021 by the Biden admin. Ironicโฆโ Rescue.โ โWe wonโt raise taxes on anyone making less than $400K a year.โ I make WAY less than that. Thanks, Joe. ๐คจ
thewalkencloset
@anniepapz they donโt go by your redemption amount but your gross (total Inc. fees, taxes, shipping, etc). The IRS still sees canceled orders as part of the gross income. Canceled orders, fees, shipping, sales tax, and what you paid when you bought items you sold, must be deducted from the gross amount reported by the IRS. In other words, donโt bother canceling orders to stop a 1099K coming your way in 2024 for this tax year.
anniepapz
@thewalkencloset but if I canceled it and donโt make a sale and I deduct that from my gross, I am not paying the tax on it, correct?
thewalkencloset
@anniepapz correct, if you deduct it from your gross when youโre filling your taxes, you wonโt be paying taxes on it.
thewalkencloset
@gamer_princess a lot of info in the comments
tracyheather
@thewalkencloset i just started building a spreadsheet and it boggles my mind that cancelled orders are factored in even when the buyer cancelled. I have over $1,000 worth of cancellations for the 12 months why is that factored into my total. Seems ridiculous. I didnโt make anything on the cancellation.
thewalkencloset
@tracyheather I totally hear you and share your frustration. The IRS has always factored cancellations as complete transactions (money was exchanged), despite the refunding of that money. The IRS makes it your responsibility to deduct the refund as an โexpense.โ Iโm convinced itโs so they bring in more money when people donโt deduct them as expenses. Because, you knowโฆgovernment! ๐
fiore_amore
I am at $596 and gross sales. But this is not what Netted (earned), I only earned about 450. Will I be required to pay taxes on the gross sales or my net sales? (What I pocket after fees?)
thewalkencloset
@fiore_amore you will be taxed on your gross sales, so based on the $596 you sold. But if your had any canceled sales, those count towards your gross sales as well. At tax time, youโll have to deduct canceled orders, PM fees, shipping and tax paid by the buyers, amounts you paid (inc. Shipping & taxes) on items you bought and then sold. But keep receipts to prove what you paid in case you are audited.
angel_apparel18
@thewalkencloset this is sooo confusing, Iโm literally so nervous to file tax OMg.
angel_apparel18
@thewalkencloset hey hun so I read a lot of your replies to the comments. So I report to the irs gross sales and then deduct all cancellations from my total on gross sales? Iโm very confused on what you said about the deduction of shipping fees and taxes? Isnโt that already payed but the buyer and taken out and not counted toward our taxes?
angel_apparel18
@thewalkencloset hey Iโm sorry to bother you but do I just add up all my earnings that I actually made and just minus the cancels and report the irs that amount?
thewalkencloset
@angel_apparel18 From digital.com: "Form 1099-K doesnโt account for merchant fees. Your reported gross sales are for the total amount of goods sold. This includes taxes, collected shipping, item cost, and any other money collected. Merchant fees, such as the fee to sell on [online selling platform], are deducted from your gross sales by you on your tax return in Section C."
thewalkencloset
@angel_apparel18 you have to deduct shipping, discounts, PM fee, canceled orders, and the amount you paid for the item(s) that sold.
angel_apparel18
@thewalkencloset thanks so much hun, I really do appreciate it. I am just filing my taxes because of a recent death in the family and I just didnโt have the time and you really helped me a lot and I really appreciate it
thewalkencloset
@angel_apparel18 Iโm sorry to hear that. But remember, you donโt need to file for selling on PM for 2022 but you will for this year when you file your taxes next year. Iโm so glad you found the help you needed. ๐
angel_apparel18
@thewalkencloset donโt we have to file for a section c self employment form anything made over 400?
misss_mey
@roadthrift
thewalkencloset
@angel_apparel18 Iโm not sure about the $400 threshold but if you receive a 1099-K from Poshmark next year, yes you have to fill out section C of the self-employment form to add your deductions. I think self-employment taxes will apply too. Check with a CPA to confirm.
since_forever5
๐ very helpful
since_forever5
@thewalkencloset ๐
thewalkencloset
@since_forever5 Iโm glad you found this helpful! Thereโs a ton of info in these comments too. If you have any questions, please reach out. ๐
pharmgyrl
@thewalkencloset Iโm also closing!!
For me itโs not only the taxes but the lion ballers are horrible!! I do better on another platform although I still pay the taxesโฆbetter decorum! Poshmark has become a low ball garage sale!
thewalkencloset
@pharmgyrl420 and thatโs why my sales have slowedโฆbecause I wonโt accept all of the low ball offers. Iโve been on here 7.5 years and yes, it has gotten worse. Add in all of the stuff that Poshmark has done that makes just selling your closet the old fashion way, and itโs more difficult to make sales. I hear you.
dosojosverdes
@thewalkencloset .... I have a stomach ache from imagining what's going to happen with my taxes for 2023... No, I am not a huge closet/huge seller but I am trying to "earn" some spending money to shop here... I am a new widow on Survivor SS, and my income CAN NOT GO UP... ๐๐๐ I think this means: I must close my closet nowโ
dosojosverdes
@thewalkencloset ... cont'd... I am using Poshmark to keep busy/distracted from my grieving process ~~~ I am sick ๐ฃ๐ฃ๐ฃ๐ช๐ช๐ช LuLu
dosojosverdes
@pharmgyrl420 .... could you help me to find my sales for 2023 so far??? I received from PM the wrong report, and I am lost now... can't remember how I requested it 2 hours ago! yeap. I am in a fog of widowhood ๐ Thanks so much!
dosojosverdes
@pharmgyrl420....
.
... FOUND โ
๐ช๐ช๐ช๐ช๐ช
thewalkencloset
@dosojosverdes I am so sorry for your loss. Truly. I canโt imagine your grief. If you need any help or support, on Poshmark or otherwise, please let me know. โค๏ธโค๏ธ
dosojosverdes
@thewalkencloset ..... I do appreciate your kind words. Thank you for taking a minute to say kind words to a total stranger. That is what has made Poshmark different from all other platforms........ am I correct? For the most part, <<< underlined, persons here are kind and polite. But, when dealing with the public we will encounter the exception: rude and more rude. I am glad to have read your TAX slide: I will keep a close eye on my earnings.... as it is... sometimes I make $0.05......
pharmgyrl
@dosojosverdes yay!!! I apologize for not seeing your post earlier as Iโm rarely on pm anymore!
pharmgyrl
@dosojosverdes as a recent widow myself I am able to make up to a certain amount before it interfering with my widows SS. Check into it!!! You are allowed to work/make money! ๐ฅฐ
suzieshanger
CPA here. You have ALWAYS been required to report all your income on your tax return. Every dollar. All they are forcing you to do is report income you should have been reporting all along, and requiring companies like Poshmark to notify them. Anyone who tells you that you don't have to report income unless it is over $600 has no idea what they are talking about. Just saying. Tax advice should only come from your own tax accountant.
thewalkencloset
@suzieshanger thanks for your invaluable input. While this is true, you know that most people who are small-time, casual sellers do not do that, nor have ever thought about it. So this lower threshold tax requirement is new to most. Otherwise, this wouldnโt be a big deal, but it is. As Iโve repeatedly said, check with an accountant on that matter. More info on reporting: https://weareindy.com/blog/do-i-have-to-report-1099-income-under-dollar600#
suzieshanger
@thewalkencloset ๐
chloe101845
@thewalkencloset They donโt ๐
lovengolightly
๐ฏ๐๐ผ๐๐ผ๐๐ผ๐ฏ๐ฏTHANK YOU!! Very Informative โค๏ธโค๏ธ
thewalkencloset
@lovengolightly You're welcome. It's a good starting point but make sure to look into it further. I need to check if there have been any further updates.
dinozyne
@thewalkencloset Hello! Itโs August 2023 and I literally just found out about this as well when my last sale put me over the threshold. ๐ญ Iโve seen previous comments above talking about canceling the last order that put them over $600. Will that work and Poshmark cannot send me the 1099 because they wonโt have my SSN?
dinozyne
I contacted Poshmark support directly about deleting my SSN for 2024 if I put it in for 2023 year, but they said their system cannot support deleting a single field so I have to delete my entire account for them to delete my SSN. So that makes me wonder, if I cancel this last sale that put me over $600 and then entirely delete my Poshmark account, can they ever send me a 1099 form if they donโt have any data?
thewalkencloset
@dinozyne quick answer: youโll still get a 1099 from Poshmark. Canceled orders count towards your taxable income; the refund from the canceled order has to be deducted as an expense when submitting your taxes to the IRS. So canceling does nothing to affect your new-found status as a taxed seller on Poshmark. โWelcome to the club.โ ๐ Iโll continue in the next commentโฆ
thewalkencloset
@dinozyne deleting your account to get rid of your SSN, will also do nothing, Iโm pretty sure. They will archive your account data. Even if they do erase your SSN during the archival process, they can still send you a 1099 using your address. Unfortunately, thereโs no escaping it. DISCLAIMER: Every CPA will say you should always report all income sources, whether you cross a threshold for reporting or not. ***The only way to get avoid it is to get Congress to act!***
dinozyne
@thewalkencloset Aw it sucks that we have to find out about this in this way ๐ญ thank you for clarifying. I guess Iโll have to deal with this headache during tax season ๐ญ
shopjewelsnmore
Hi.So my taxes for 2022 are just now getting done and what a headache! Last Thursday I get a phone call that my rental tenant had a kitchen fire at my rental property. Then Friday I get a phone call from my accountant saying that I owe the IRS a whopping $4500 to them for my poshmark sales!!! I just read this whole thread! I had to go back my entire sales and tally up my CANCELLED SALES! Thank God it matches the difference from my Net earrings and 1099 Sales and now I can give this info her! ๐น
contentcontemp
Hello! Is there a way for me to message you to ask more about this? I just started selling that as a way to make some money after being laid off and I am a bit worried about how taxes will work for me or if I am already breaking some kind of law. Thank you o much, I really appreciate it.
thewalkencloset
@hellonhipham yes, Iโll send you a message via your bundle. ๐
kristyhen
Stop voting blue!
kristyhen
@mixon4christ vote red
kristyhen
@scralice vote red
kristyhen
@thewalkencloset vote red
kristyhen
@thewalkencloset thank joe Biden
kristyhen
@thewalkencloset Biden was the worst thing for this country
kristyhen
In all seriousness how why are reporting at $600 when Poshmark takes 20%???????? Is this a way for the government to tax twice (us and Poshmark)? Someone help me understand
thewalkencloset
@kristyhen I totally agree with your sentiments but I kindly and respectfully ask that we keep this thread as apolitical as possible. ๐ We are ALL frustrated with this tax policy & many donโt know who or why it was changed (to your point). As for why? Itโs government. The more it can tax you, the more it can waste. They CLAIM itโs to hook the tax dodgers. ๐ Going from $20k to $600 in reporting IS ridiculous.
scralice
YES girl! Iโve been voting red since 18. ๐๐ป
mixon4christ
@kristyhen just donโt file. The irs is a fraud organization anyway. ๐
kristyhen
@mixon4christ lol l like the way you think!
kristyhen
@scralice โค๏ธโค๏ธโค๏ธ
kristyhen
@stacybarrett465 the people in charge of the irs changed it in 21 during the current administration
kristyhen
@thewalkencloset i understand keeping it apolitical here. Itโs a place to share fashion and have fun. Just burns me up lol. And itโs obviously a new law set by I R S under the current administration. Just want to bring light to that.
bubbles1971
IRS delays $600 reporting rule for online payments โ again"
YYYYEEESSS!!! HOORAY!๐๐๐๐
bubbles1971
"Instead, the IRS will rely on a preexisting threshold โ more than 200 transactions that exceed $20,000 in income โ for sending 1099-Ks in early 2024 for completing the current tax year's returns."
๐๐๐๐๐๐๐๐ค
bubbles1971
"In a key revision to the law, the IRS said that starting in tax year 2024 it will transition toward the new rule by increasing the reporting threshold from $600 to $5,000. For the 2025 tax year, the threshold would step down to $600, unless the IRS makes additional changes. "
thewalkencloset
@bubbles1971 this is amazing news! Hopefully, it will be struck down in the next year or so, considering hope much theyโve changed it since 2020. ๐ Thank you so much for sharing!
bubbles1971
@thewalkencloset Now if only I could make some sales!! Lol been so slow
thewalkencloset
@bubbles1971 I hear you! Itโs been incredibly slow for me this year. But I havenโt been as active. The company I work for went through an acquisition so Iโve been busy. I havenโt listed anything much this year. Iโm so backed up!
ms_quinzel
@bubbles1971 That's what I read as well.
shopfablooks
@luckyladybug4u donโt want to give my SSN,got same thing,have been using EIN just fine,got same message,couldnโt add EIN again,locked me out bc said I tried too many times,try again tomorrow,started on Saturday,tried Sunday, same thing,canโt save my EIN,canโt print shipping labels, same thing today, anyone have same situation with EIN?What did you end up doing, also about being locked out,called IRS twice,they said everything was perfect w/my EIN,have not gotten much support
thewalkencloset
@shopfablooks you might want to reach out to Poshmark Support, if you havenโt already. They should be able to look into it out reset it for you.
stardustselegy
this will be my last year selling on posh XD as i buy expensive clothes for myself and often sell them when i get bored of them, or if they don't suit me after trying on a few times,
honestly after this year I plan to be MUCH less impulsive with my 'buying' so i dont have much to 'sell' anymore, this truly sucks for the stay at home moms just trying to make a few extra grand per year, i honestly think they should let it stay 5,000, I think 20,000 is too high, but 5,000 is enough for pocket
stardustselegy
honestly i can NOT be a$$ed to take a record of ever single blouse, dress or skirt I buy just so I dont have to sweat the IRS comnig for me lol, I think this tax is a scheme to deal with some of the debt in this country, much easier to go after the poor then rich. lol
refinecloset188
@thewalkencloset Hello! Iโm new to this, and I wanted to ask what is going to happen this yearโฆ so if we earn more than 600 USD this year, say until the end of Dec 2024, we would have to pay tax???
thewalkencloset
@elegyfordreams I do a lot of impulsive buying too and have tons to sell but $5K threshold is still too low for me. ๐ And I agree, this is a money grab. The irony? This came out of the American Rescue Act. Whoops. ๐
thewalkencloset
@gocabinets666 welcome to Poshmark! As it currently stands, yes, youโll have to pay taxes on sales over $600. But theyโve delayed it for the last two years. I hope they delay it (or just eliminate it!) again this year. However, until they say otherwise, plan on being taxed.
refinecloset188
@thewalkencloset thank you so much for explaining!! I really hope they delay it too ๐ฅฒ
stardustselegy
@thewalkencloset Wellllllll it will rescue us from impulse buying, seriously half of us need therapy for emotional spending LOL this 'tax thing' is like the tipping point for us americans to realize why we are impulsive and materialistic esp more then alot of other countries. Like i am glad the low threshhold is coming as i wont spend so freely thinking ' w.e i can get it back in a few months'
stardustselegy
@thewalkencloset also 2024, is now marked as a transition year so this years limit is 5k, 2025 will be 600, its why im using this as my last year to 'cull' my closet in half, I have put it on ALL my listings this is my last year selling my old stuff lol and ill be impulse buying a lot less
rsiem
@elegyfordreams you also have to have had over 200 or more in transactions. Itโs AND not OR. Hope that helps
shoper1977
@elegyfordreams hi there
So if we sell more then $5,000 this year will get a 1099 next year ?
shoper1977
This is what found in tax section here at poshmark
โ
The IRS recently issued guidance delaying the implementation of the new $600 gross sales reporting threshold by another year. For the 2023 tax year, Poshmark is required to provide any seller with $20,000 or more in gross sales and 200+ transactions on our platform during the 2023 calendar year with a Form 1099-K.
Sellers who meet their residing state tax filing requirements in 2023 will also receive a Form 1099-K.
kimbyer24
Hi I just sold a purse and a pop up from posh says to complete the sale enter your social security number it sold for $75?? Do you happen to know why? Thanks so much
thewalkencloset
@kimbyer24 that means youโve hit the magical $600 in sales annually and now youโre caught in the tax trap. In order to print the shipping label, you need to enter your SSN. And canceling wonโt make a difference because canceled sales still count towards the $600 threshold. That said, I was recently informed that the tax threshold for receiving a 1099K for 2024 is $5K.
kimbyer24
Thanks so much
tuesdai_noelle
Hi,
I haven't sold anything since the first week of January (this year)--but have long reached pass the $600 mark. Therefore, entering a SSN hasn't been asked of me yet (as everyone is saying). I switched to receive my 1099 tax by mail. My questions are: when should I receive it to file? What all will I be able to claim far as expenses (such as shipping supplies etc)?
Thank you in advance :-)
actuallyvintage
Has ANYONE received the 1099 yet??? They're supposed to send them out by January 31 and I've signed up for e-delivery, but have not yet received anything. Eager to know what to expect (I have sales beyond the 5k base). Thanks!
miner48
@thewalkencloset Hi i had a question just want to make sure i got this correct. So for this year 2024 the selling threshold is 5K ? And once we meet that amount or over 5K we have to fill out 1099?
thewalkencloset
@tuesdai_noelle if you havenโt been prompted to enter your SSN, then you havenโt hit the threshold yet. Unless you surpassed the selling threshold of $20K & 200+ transactions in 2023, youโre not going to get a 1099K sent to you by Poshmark for this tax filing season. If you sell $5K in 2024, youโll get a 1099K in early 2025 to file your 2024 taxes.
thewalkencloset
@tuesdai_noelle you can file expenses and deductions. Deductions include canceled orders, shipping costs from orders, the original cost of items sold (keep receipts 7 years after filing for proof in case youโre audited), etc. You can expense business related costs such as packaging materials, ink, office supplies, mileage, etc. But technically, that means filing taxes as self-employed which is even more involved & may increase tax liability. Best to speak with a CPA.
thewalkencloset
@actuallyvintage 20K threshold applied to the 2023 tax year so unless you sold that much, you wonโt get a 1099K from Poshmark this filing season. The $5K threshold applies to 2024. So thatโs good news for you because you donโt have to wait on the 1099K to file your taxes now.
actuallyvintage
@thewalkencloset Thank you! Yes, I did realize after commenting that I had 200+ sales for 2023, but hadnโt reached the 20k threshold (thought it was either / or rather than both required). So I am relieved, to be sure! Thanks so much for the feedback ๐
thewalkencloset
@miner48 yes, the $5K threshold is for 2024. Once you meet that threshold, if Poshmark doesnโt already have your SSN, youโll be asked to enter it. Then, they will send it to you automatically in early 2025 to file your 2024 taxes. You will receive it either electronically or by mail. You can elect the method to receive it in your Poshmark settings.
thewalkencloset
@actuallyvintage youโre welcome! ๐
tuesdai_noelle
@thewalkencloset Thank you so much for responding. All of the information of both replies has been most helpful!
marlo7
Thank you for being so thoughtful and posting this info๐บ
saucyandsassy
'Mama Mia!' to all of this!!! Thanks, @thewalkencloset , for initiating this continuing conversation. 'Bad Girl!' to Poshmark for not addressing this issue to us poshers in a more direct, timely way.
izeandirie
Want to add to this thread. Seller here from MA, received the 1099k in the mail - have less than 20k and < 200 transactions.
Certain states unfortunately have a threshold ๐ซ and if youโre from the below states - theyโll send you the 1099
MA, DC, MD, MT, VT and VA are at $600. AR is $2.5k IL $1k and NJ 1k. All other states have the $20k and >200 transactions
thewalkencloset
@izeandirie I did not hear about that and after doing some research, your point about individual state reporting is rarely mentioned; if it is, it's in passing. I'll be sure to update my post & price drop the post to notify likers. I wish they would just drop this new threshold altogether...
angel_apparel18
@izeandirie I told thot to my tax rep and she said thatโs not true and I live in ma
thewalkencloset
@angel_apparel18 wow, sounds like you better find someone else to do your taxes! Thanks again for the info!
marchild_ja
Thank you for sharing this info!
shoper1977
Thank you for the update
izeandirie
@angel_apparel18 you may be correct- reading more into this. Looks like you donโt have to report to the IRS but have to submit the form to the DOR (Dept of Revenue)
โWhere amounts paid in settlement in a calendar year to a payee meet the Massachusetts threshold but not the IRS threshold, a TPSO should submit Form 1099-K to the Department directly using MassTaxConnect (MTC).โ
angel_apparel18
@izeandirie yes that sounds right, my irs agent told me I donโt have to pay a tax on those but I definitely should always report my earning
angel_apparel18
@thewalkencloset no my tax agent is very good, as shown by the reply from the girl that said that. You donโt pay those taxes but you have to report them to the state. You have to report any earnings to have to all 50 states. But they arenโt taxable
hansuzcloset
@thewalkencloset hi! I am relatively new to Poshmark and have made a couple sales so far in 2024. Can you give me a rough estimate of a % that I would have to pay back in taxes from my Poshmark earnings? I am only selling things that were gifts to me, or things that I no longer wear/use. I can understand the frustration with even having to pay taxes on it in the first place, but I do feel like if I am still going to make a profit in the end, it is worth it for me to continue. What do you think?
thewalkencloset
@hansuzcloset I canโt estimate % tax rate because IRS based on your overall tax rate/income bracket. As for paying taxes on sales, the 1099 will have all POTENTIAL income reported by Poshmark. You deduct canceled orders, shipping, shipping materials, Original cost of items sold. If you paid more than what you sold items for (no profit), you wonโt pay taxes but that means tracking expenses, Original receipts, etc.
thewalkencloset
@hansuzcloset If youโre not making a profit in sales after deducting Original costs for each item, you wonโt pay taxes on those sales. Therefore, I say itโs worth it IF you track receipts and expenses to deduct from the reported income on the 1099. If you do not want to track these things, do not sell stuff because otherwise youโll pay taxes on the reported income on the form.
hansuzcloset
@thewalkencloset thank you for your response! for the items I am selling, I do not have any original receipts. They are all things I have had for years or were gifted to me. So if I do not have original receipts from the items, I will have to pay taxes on them?
proverbs19_17
had a question can't seem to get a straight answer from poshmark other then 1099 is gross sales paid by buyer. So my question is simple the gross amount a buyer pays has the shipping they paid and sales tax. is shipping and sales tax the buyer paid in my 1099 as a seller and therefore i have to figure out how to deduct that. or is my 1099 relfect shipping and sales tax the buyer paid is not reflected in that total and i don't have to worry about it. any idea where i find total posh fees paid
thewalkencloset
@hansuzcloset if you ever are audited, youโll need receipts to prove your deducted amounts. Otherwise, use โreasonableโ estimated costs that are substantiated by historic resources. But the main reason to have receipts is in case of an audit. Another reason to have a CPA do your taxes.
thewalkencloset
@proverbs19_17 quick answer: yes, the gross amount will include the shipping and taxes paid by the buyer. Itโs ridiculous but youโll have to deduct all of it. This includes canceled orders too. Poshmark provides basic sales data: go to Seller Tools >> Sales Report and select the year. A report will be sent to your email. I hope this helps.
mrsb_0611
@thewalkencloset Thank you for this information! I just want to make sure they need my social before they can report, right? I think that if they get to that point Iโll just open a new closet. Isnโt that an option too? Iโve seen people with multiple closets&ambassadors. Iโm wondering now if thatโs why! Sadly for some of us, like myself, something this small puts us into a different tax bracket&is the difference to breaking even to owing thousands! But it keeps me sane while home&grieving.
mrsb_0611
@izeandirie I couldnโt find the breakdown of states and Posh wouldnโt respond to emails for clarification. Just to be certain, is TX $20k a year or $600? I greatly appreciate your help! Thank you ๐
izeandirie
@mrsb_0611 hi! This is what i saw online - โThe state of Texas does not require you to file Form 1099 as there is no state income tax. Even though the State of Texas does not require 1099 Form, the IRS still requires you to file Form 1099 to report payments and the taxes withheld for each of your recipients for the year.โ
mrsb_0611
@izeandirie Ugh ๐ฉ Thank you. Itโs the federal reporting that is the killer especially when Iโve paid taxes on these items once. I appreciate your response!
izeandirie
@mrsb_0611 I received a 1099-K and declared it on my tax form- i did my own taxes and used TT. I also did a breakdown of expenses I used, like shipping supplies, gas etc. and my starting inventory was close how much my closet was - and I also used same amount as my inventory for end of the year.
izeandirie
@mrsb_0611 And then thereโs a question that says - Purchases less cost of items withdrawn for personal use - since my inventory is mostly items i bought - the amount is close to what the amount is in my 1099K and I think that evens it out.
I am not a tax professional so not sure if these are correct but my form was accepted and got my return 2 weeks after. I also stated that I didnโt have evidence to support my deduction. I made about 6.5k if it helps.
mrsb_0611
@izeandirie That does, thank you! I am only close to $600 so far this year but I do have a lot of jewelry listed for sale. I would have just taken it to a pawn shop but it was my daughters and was trying to keep it going to families who could pass it down to their kids. But goodness, I am definitely going to be cautious and use as many write offs as possible! Thank you again!!
thewalkencloset
@mrsb_0611 hi! Since @izeandirie addressed many aspects of your questions, Iโll answer to the SSN part. Even if you donโt give it to Poshmark, if you trigger the requirement for a 1099K from Poshmark, youโll still get the 1099K. From what Iโve read, it will be based on your address and it will be an estimated gross (less accurate) than if they had your SSN. So thereโs no point in opening multiple closets for that purpose.
bubbles1971
Sure hope someone repeals this for next year or at least delay again- was hoping to sell off as much as possible this year but sales unbearably slow
bubbles1971
Found one article online it can't read without subscription:
"The House Ways and Means Committee voted to advance a set of five tax-related bills, including one that would eliminate a twice-delayed requirement to report payments of at least $600 received through third-party networks like V"
thewalkencloset
@bubbles1971 I second that. Iโve hardly sold anything this year. Itโs crazy!
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