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thewalkencloset
thewalkencloset
Updated Oct 04
thewalkencloset
thewalkencloset
Updated Oct 04

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 & Arenโ€™t 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. ๐Ÿคทโ€โ™€๏ธ โ€ผ๏ธ CANCELED ORDERS DO COUNT TOWARDS YOUR TAXABLE INCOMEโ€ผ๏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 donโ€™tโ€ฆ& 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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406 Comments
mixon4christ
mixon4christ @multarjr Wow, thx for posting this, I wasnโ€™t aware. ๐Ÿ˜ฃ๐Ÿ™๐Ÿ˜ซ๐Ÿ™ˆ
Jan 05Reply
thewalkencloset
thewalkencloset @mixon4christ youโ€™re welcome. Itโ€™s unwelcome news but better to know whatโ€™s coming than get sideswiped by the IRS. So far, I havenโ€™t 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.
Jan 05Reply
thewalkencloset
thewalkencloset @mixon4christ *havenโ€™t* risen prices yet.
Jan 05Reply
scralice
scralice @multarjr I cannot get any answer regarding Poshmark. Iโ€™m hoping we see an announcement soon. Iโ€™m not going to sell anymore than $600 on posh. This was fun for the last two years.
Jan 18Reply
thewalkencloset
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.
Jan 18Reply
scralice
scralice @multarjr yep Iโ€™m going to close my shop until next year๐Ÿ˜‚. What a joke. Things are getting crazier and crazier. Happy New Year to us.
Jan 18Reply
thewalkencloset
thewalkencloset @scralice thatโ€™s so sad because you have a great closet! I donโ€™t know how these selling platforms donโ€™t 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. โ€œRescueโ€ my butt. If itโ€™s implemented, it wonโ€™t be just this year.
Jan 18Reply
thewalkencloset
thewalkencloset @scralice unless itโ€™s repealed by Congress. I think.
Jan 18Reply
bubbles1971
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
Feb 01Reply
thewalkencloset
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.
Feb 01Reply
bubbles1971
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
Feb 01Reply
thewalkencloset
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.
Feb 01Reply
thewalkencloset
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..."
Feb 01Reply
thewalkencloset
thewalkencloset Why on earth would CANCELED ORDERS count towards gross sales?! They're canceled and we don't receive any payout for them!
Feb 01Reply
bubbles1971
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.
Feb 01Reply
bubbles1971
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
Feb 01Reply
solace_curated
solace_curated @bubbles1971 @multarjr so if they wonโ€™t send a 1099k, what did you do? My husband is freaking out. I sold 1700 on P and 1100 on M.
Mar 26Reply
thewalkencloset
thewalkencloset @solace_curated Iโ€™m assuming youโ€™re 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.
Mar 26Reply
crystalg13
crystalg13 @bubbles1971 did you figure out what amounts count towards the threshold? I emailed them but havenโ€™t heard back. Trying to figure out if I hit the threshold or not!
Apr 23Reply
bubbles1971
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.
Apr 24Reply
bubbles1971
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.
Apr 24Reply
thewalkencloset
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.
Apr 24Reply
happygilmore13
happygilmore13 @multarjr do we know why it went from $20k to $600 that seems really insane?!?!?!
Jun 24Reply
thewalkencloset
thewalkencloset @stacybarrett465 it is insane but it was changed in the American Rescue Act passed in 2021. So much for โ€œRescue.โ€ ๐Ÿ™„
Jun 24Reply
happygilmore13
happygilmore13 @multarjr who is it rescuing itโ€™s 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?
Jun 24Reply
thewalkencloset
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 didnโ€™t) but youโ€™ll have to pay more in taxes. ๐Ÿ™„ Your questions points to the pain in butt about itโ€”if 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, itโ€™s A LOT of bookkeeping! You have treat it as a small business.
Jun 25Reply
happygilmore13
happygilmore13 @multarjr thank you for the info. Those checks were in 2021 not 2022 so it really still doesnโ€™t make any sense but what can I do?
Jun 25Reply
thewalkencloset
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.
Jun 25Reply
happygilmore13
happygilmore13 @multarjr shipping & cancelled orders? We donโ€™t pay shipping and a cancelled order does not contribute to sales. I only have 1 cancelled order anyway but that doesnโ€™t make any sense. I guess I will wait and see what Poshmark sends me at the end of 2022/beginning of 2023 I really donโ€™t 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 ๐Ÿ€
Jun 25Reply
thewalkencloset
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!
Jun 25Reply
zoeserendipity
zoeserendipity Thank you for posting! Iโ€™ve 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? ๐ŸŒธYou have a beautiful closet ~ Zoe
Aug 25Reply
thewalkencloset
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.
Aug 25Reply
zoeserendipity
zoeserendipity @multarjr โค๏ธ
Aug 25Reply
luckyladybug4u
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....๐Ÿคฆโ€โ™€๏ธ๐Ÿคฆโ€โ™€๏ธ๐Ÿคฆโ€โ™€๏ธ
Aug 29Reply
luckyladybug4u
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.
Aug 29Reply
luckyladybug4u
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.
Aug 29Reply
luckyladybug4u
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?
Aug 29Reply
thewalkencloset
thewalkencloset @luckyladybug4u I had to give PM my SSN back in January because thatโ€™s when I hit the $600 threshold & I needed to print a shipping label. Despite raising prices in January, Iโ€™m still exceeding my sales from last year. I run sales and giveaways, which help. Everyone is in a tough pickle right now, whether youโ€™re selling or buying. It stinks.
Aug 29Reply
thewalkencloset
thewalkencloset @luckyladybug4u Iโ€™m 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.
Aug 29Reply
luckyladybug4u
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.
Aug 29Reply
luckyladybug4u
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.
Aug 29Reply
luckyladybug4u
luckyladybug4u @scralice I'm with you girl. ๐Ÿ‘ 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.
Aug 30Reply
thewalkencloset
thewalkencloset @luckyladybug4u thanks. Iโ€™m aware of all sales tools as I use them weekly. ๐Ÿ˜Š Iโ€™m WELL over the $600 threshold but I decided to bite the bullet and just run with it. I canโ€™t wait for my first audit. ๐Ÿ™„
Aug 30Reply
luckyladybug4u
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).?
Aug 30Reply
luckyladybug4u
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.
Aug 30Reply
thewalkencloset
thewalkencloset @luckyladybug4u you never heard of it because Poshmark didnโ€™t 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.
Aug 30Reply
luckyladybug4u
luckyladybug4u @multarjr Thank you dear, you are a wealth of knowledge! ๐Ÿ‘๐Ÿ‘๐Ÿ‘
Aug 30Reply
thewalkencloset
thewalkencloset @luckyladybug4u just trying to help where I can. Iโ€™m sorry to see you and others leave but itโ€™s totally understandable. I wish you the best! Take care. ๐Ÿ˜Š
Aug 30Reply
luckyladybug4u
luckyladybug4u @multarjr ๐Ÿฅฐ๐Ÿฅฐ๐Ÿฅฐ๐Ÿฅฐ
Aug 30Reply
carolsmith436
carolsmith436 Wow!!!thank you for sharing!! I had absolutely no idea ๐Ÿคจ๐Ÿง๐Ÿ˜’โ˜น๏ธ๐Ÿฅบ
Sep 17Reply
thewalkencloset
thewalkencloset @carolsmith436 itโ€™s crazy how many people donโ€™t know about this. Most people donโ€™t 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. Itโ€™s ridiculous that PM hasnโ€™t been more open about thisโ€ฆmost likely because they want to avoid a mass exodus of sellers and therefore, loss of profit (especially since theyโ€™re publicly traded now).
Sep 17Reply
kimtomko
kimtomko I donโ€™t 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?
Oct 05Reply
thewalkencloset
thewalkencloset @kimtomko ugh, Iโ€™m so sorry youโ€™re just finding out about this. First, download your sales report and make sure you werenโ€™t 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.
Oct 05Reply
kimtomko
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?
Oct 05Reply
thewalkencloset
thewalkencloset @kimtomko I know, it sucks. Unless Congress repeals the American Rescue Act, passed in 2021, it will go into 2023 and beyond. ๐Ÿ˜’
Oct 05Reply
kimtomko
kimtomko @multarjr sorry one more questionโ€ฆ.will I be taxed on all of my sales for the year or just the sales that exceed the $600 mark?
Oct 05Reply
thewalkencloset
thewalkencloset @kimtomko I believe itโ€™s all sales for the tax year if you exceed $600. This MAY include being taxed on shipping and canceled orders! Which is insane if thatโ€™s the case. Poshmark has failed to clarify that but check your sales report. But this is why I block people who cancel orders without explanationโ€”canceled orders as to my tax liability despite NOT MAKING ANYTHING on the canceled sales. Itโ€™s not right.
Oct 05Reply
kimtomko
kimtomko @multarjr thanks so much!
Oct 05Reply
yvetteyvetteyve
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.
Oct 14Reply
thewalkencloset
thewalkencloset @yvetteyvetteyve I donโ€™t THINK so but Iโ€™m not certain. Iโ€™ve come to this conclusion that if the sales report is to be used for accounting purposes and itโ€™s doesnโ€™t include canceled orders, then it shouldnโ€™t 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.
Oct 14Reply
yvetteyvetteyve
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
Oct 14Reply
thewalkencloset
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.
Oct 14Reply
yvetteyvetteyve
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.
Oct 14Reply
yvetteyvetteyve
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.
Oct 14Reply
thewalkencloset
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.
Oct 14Reply
kelmccue
kelmccue @multarjr i donโ€™t understand how a canceled transaction counts when no funds were received?
Oct 14Reply
thewalkencloset
thewalkencloset @kelmccue thatโ€™s the way our โ€œwonderfulโ€ IRS works. ๐Ÿ™„ 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 donโ€™t recognize it upfront in hopes that you donโ€™t 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.
Oct 14Reply
thewalkencloset
thewalkencloset @kelmccue hereโ€™s 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
Oct 14Reply
thewalkencloset
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! ๐Ÿคฌ Read this article & click the โ€œsolepreneurโ€ link for self-employment. https://turbotax.intuit.com/tax-tips/irs-tax-forms/form-1099-k-decoded-for-the-self-employed/L6xHSTXwR
Oct 14Reply
sarahs567
sarahs567 Thank you for replying to my text!! So upset!!
Nov 11Reply
thewalkencloset
thewalkencloset @sarahs567 of course! I wish I had better news to share. ๐Ÿ˜• Iโ€™m not looking forward to tax time, especially since I grew my boutique a lot this year.
Nov 11Reply
sarahs567
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 โค๏ธ. At this point it doesnโ€™t pay to shut down. But not sure if after December 31 if I will continue ๐Ÿฅฒ
Nov 11Reply
thewalkencloset
thewalkencloset @sarahs567 I completely agree with you. Itโ€™s ridiculous that we should be taxed on stuff that we already bought & just looking to rehome. Itโ€™s a catch-all tax that includes those who donโ€™t typically use accountants; therefore, overpay on their taxes. And with 80k IRS agents coming our way, audits will increase. I hate it.
Nov 11Reply
fashionably_flo
fashionably_flo Thank you so much for posting all this great info.
Nov 14Reply
kdenton7
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!!
Nov 17Reply
thewalkencloset
thewalkencloset @kdenton7 you should be Ok if you canceled the order. If you didnโ€™t submit your SSN, they canโ€™t send you a 1099K. The sales report doesnโ€™t 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 theyโ€™re not written off, then you run the risk of grossly overpaying on your taxes.
Nov 17Reply
thewalkencloset
thewalkencloset @kdenton7 all*, not ask.
Nov 17Reply
kdenton7
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 ๐Ÿ™
Nov 17Reply
thewalkencloset
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.
Nov 17Reply
thewalkencloset
thewalkencloset @kdenton7 ha! You already did. ๐Ÿ™‚
Nov 17Reply
kdenton7
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 ๐Ÿ˜… I'll share anything useful I might learn!!
Nov 17Reply
thewalkencloset
thewalkencloset @kdenton7 Support will most likely unhelpful, as they have been in the past. Theyโ€™ll point you to their FAQs or support page which just says general stuff and suggest to speak to an accountant. Poshmark hasnโ€™t been very open about the matter, hence my post. ๐Ÿ˜
Nov 17Reply
vlc823
vlc823 @thewalkencloset I am also closing
Nov 18Reply
thewalkencloset
thewalkencloset @vlc823 Iโ€™m 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.
Nov 18Reply
clean4cash
clean4cash @thewalkencloset E has done it or a few yrs now. Just another way of them making debt slaves to the e lites!! ๐Ÿ˜ก
Nov 22Reply
clean4cash
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.๐Ÿ‘‡๐Ÿป๐Ÿ‘‡๐Ÿป
Nov 22Reply
clean4cash
clean4cash Donโ€™t worry about the shipping, itโ€™s a write off. You may want to find a small /home business accountant. Ask your friends, everyone knows someone whoโ€™s an accountant! Iโ€™ve 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 thereโ€™s other things you can use towards your deductions.
Nov 22Reply
clean4cash
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.
Nov 22Reply
clean4cash
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.
Nov 22Reply
clean4cash
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.
Nov 22Reply
clean4cash
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
Nov 22Reply
clean4cash
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.
Nov 22Reply
clean4cash
clean4cash When you sell a good below the cost you originally paid, there is no profit and therefore no income tax owed. If youโ€™re one of the millions of Americans who use marketplaces as the virtual equivalent of a yard sale, youโ€™ll 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 -
Nov 22Reply
clean4cash
clean4cash if you sell even a single item for more than $600 dollars online, youโ€™ll now get a tax form, and need to be able to prove to the IRS that you did not make a profit. Americans shouldnโ€™t be forced to choose between making money on used goods and facing the IRS. Weโ€™ve seen how difficult it is for the IRS to process Americansโ€™ returns on time.
Nov 22Reply
clean4cash
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).
Nov 22Reply
clean4cash
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,
Nov 22Reply
clean4cash
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!
Nov 22Reply
thewalkencloset
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. Iโ€™ve already reached out to Murray about this issue. But Iโ€™ll send in the letter nonetheless. Thank you.
Nov 22Reply
clean4cash
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. Iโ€™m on the east side of the state! Where are you?
Nov 22Reply
thewalkencloset
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. Iโ€™m in Seattle. Where in the east side of the state are you? My dad is in Richland where itโ€™s more sane.
Nov 22Reply
clean4cash
clean4cash @thewalkencloset Us too and she wasnโ€™t that far behind Patty. Weโ€™re in Spokane. We canโ€™t 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.
Nov 22Reply
allie3210
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!
Nov 30Reply
thewalkencloset
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 wouldโ€™ve gone against their own self-interests. Iโ€™m 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.
Nov 30Reply
nikki_choi
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!
Dec 13Reply
kdenton7
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.
Dec 13Reply
kdenton7
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...
Dec 13Reply
kdenton7
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...
Dec 13Reply
kdenton7
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. ๐Ÿ™„
Dec 13Reply
nikki_choi
nikki_choi @kdenton7 Aww ok, this sucks! Thanks for letting me know! Appreciate it!
Dec 13Reply
nikki_choi
nikki_choi @kdenton7 so annoying! Not helpful at all!!!
Dec 13Reply
nikki_choi
nikki_choi Thanks for sharing all this info!!
Dec 13Reply
nikki_choi
nikki_choi You are so helpful! Appreciate it!! :)
Dec 13Reply
itslurock
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 havenโ€™t submitted anything as of yet to Poshmark but itโ€™s looking like I will have to.
Dec 18Reply
itslurock
itslurock @kelmccue thatโ€™s exactly what Iโ€™m 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 Iโ€™m good on thatโ€ฆ.
Dec 18Reply
az148
az148 So cancelled orders count as well?? Iโ€™m hoping to cancel this new order so I donโ€™t pass the threshold
Dec 20Reply
thewalkencloset
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 donโ€™t submit your SSN, Poshmark can send an โ€œunofficialโ€ 1099K to your address on file & youโ€™d have to enter it for filing your taxes. ๐Ÿ˜’
Dec 20Reply
az148
az148 @thewalkencloset Thanks! are they going to suspend my account if i dont submit my SSN and cancel the order?
Dec 20Reply
thewalkencloset
thewalkencloset @az148 oh no, not at all. I know several people who have done that with no issues.
Dec 20Reply
aimer1013
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 didnโ€™t even make. I am wondering if I close my store and do not sell the form if everything will reset January 1.
Dec 20Reply
thewalkencloset
thewalkencloset @aimer1013 unfortunately, counting canceled orders is not illegal. In fact, itโ€™s in the IRS code. The refund becomes a write off/deduction when your file your taxes. Which is stupid because if you donโ€™t, 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.
Dec 20Reply
az148
az148 @aimer1013 ugh agree 100% โ€ฆI believe it should reset in the new year since the legislation accounts for one year
Dec 20Reply
az148
az148 @thewalkencloset Does the $600 threshold reset in Jan 2023 and I will be able to selll again without submitting my SSN? Right now Iโ€™ve cancelled the order that made surpass $600 for this year 2022
Dec 23Reply
lilyyyflowerrr
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 wasnโ€™t $600 on sales ๐Ÿ˜ฃ I wish I knew before.
Dec 23Reply
thewalkencloset
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 donโ€™t have your SSN.
Dec 23Reply
bubbles1971
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
Dec 24Reply
bubbles1971
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.
Dec 24Reply
thewalkencloset
thewalkencloset @bubbles1971 so are you saying we wonโ€™t be getting 1099Ks from Poshmark for 2022?
Dec 24Reply
bubbles1971
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
Dec 24Reply
thewalkencloset
thewalkencloset @bubbles1971 I read a few articles about it. THANK GOODNESS. Hopefully it will be enough time to turn it over. Iโ€™m sorry you lost out on income though!
Dec 24Reply
thewalkencloset
thewalkencloset @bubbles1971 thank you so much for this new update! Iโ€™m sure it will be relief to many and a frustration to others like yourself. Iโ€™m sorry.
Dec 24Reply
bubbles1971
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
Dec 24Reply
rebshaw68
rebshaw68 Yeah I have a concern. This absolutely sucks. Iโ€™m not happy with the politicians at this point. I will definitely be contacting my congressman. Thank you.
Dec 24Reply
hudsonvalleyzoo
hudsonvalleyzoo Very informative. Thanks so much for all the effort you put into explaining the issue. ๐Ÿ˜Ž
Dec 24Reply
thewalkencloset
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 -------โ€”โ€” PLEASE SEE UPDATE. @ TOP OF DESCRIPTION. --------
Dec 24Reply
rebshaw68
rebshaw68 Thank you and thank goodness.
Dec 24Reply
itslurock
itslurock Great news! Thank you so much for the updated information. What a relief.
Dec 25Reply
clean4cash
clean4cash @thewalkencloset this is FABULOUS NEWS! Thank you so much for sharing this with us all! Merry Christmas!
Dec 25Reply
az148
az148 @thewalkencloset appreciate you sharing this!! I still have an order that hasnโ€™t shipped but poshmark isnโ€™t letting me print the label - do you think they will update their system to reflect the IRS news soon?
Dec 25Reply
thewalkencloset
thewalkencloset @az148 since Poshmark wasnโ€™t very open with the change in tax policy to begin with, I donโ€™t have much hope they will notify Poshers about the delay. My guess is that theyโ€™ll still require your SSN since itโ€™s still in effect for 2023. Once you enter your SSN, you canโ€™t delete it. But I would email Support to check. You may not hear back until sometime next week.
Dec 25Reply
luckyladybug4u
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 ๐ŸŽ„๐ŸŽ๐Ÿ˜
Dec 25Reply
thewalkencloset
thewalkencloset @luckyladybug4u itโ€™s all thanks to @bubbles1971 ! She let me know in the comments above. It applies to all who wouldโ€™ve fallen under this tax rule for 2022. It is a welcomed reprieve! Merry Christmas!
Dec 25Reply
luckyladybug4u
luckyladybug4u @thewalkencloset Yes, Merry Christmas to you also ๐ŸŽ„ Best gift Santa could give us sellers! ๐ŸŽ๐ŸŽ๐ŸŽ
Dec 25Reply
pdkpt99
pdkpt99 โ€œThanks 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. Itโ€™s actually a double tax. Pay when you buy the merchandise and pay when you sell! Ridiculous!โ€
Dec 29Reply
kimtomko
kimtomko Thank you so much for the update! Great news!
Dec 30Reply
mam909
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.
Dec 30Reply
thewalkencloset
thewalkencloset @mam909 I completely understand how you feel. But policies, such as canceled orders, isnโ€™t Poshmarkโ€™s policy. Itโ€™s the IRS! Yes, it should be illegal bc itโ€™s a sneaky way to collect more taxes, in hopes you donโ€™t deduct the refund as an expense. Itโ€™s the govt you need to be mad at. It was added to the Biden Adminโ€™s American Rescue Act passed in 2021. So much for no new taxes on income under $400k! ๐Ÿ˜ก
Dec 30Reply
thewalkencloset
thewalkencloset @mam909 See my update on top of the description though. At least some good news for now & hopefully later, theyโ€™ll change it back permanently.
Dec 30Reply
thewalkencloset
thewalkencloset @kimtomko much welcomed news but Congress needs to reverse it permanently. Make sure to write to your representatives! We need to pressure them. Thereโ€™s 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.
Dec 30Reply
thewalkencloset
thewalkencloset @pdkpt99 it certainly can be a double tax if youโ€™re not tracking EVERY DETAIL! And if youโ€™re not โ€œa businessโ€ but just a regular Posher trying to get rid of stuff, youโ€™re 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 donโ€™t do that, yes, itโ€™s a double tax.
Dec 30Reply
caliklassic
caliklassic Amazing, thank you for posting this!!! ๐Ÿฅ‡
Dec 30Reply
thewalkencloset
thewalkencloset @caliklassic youโ€™re welcome! Youโ€™ll find more info shared throughout the comments as well. Fingers crossed that Congress will reverse it altogether.
Dec 30Reply
caliklassic
caliklassic @thewalkencloset ๐Ÿ’ฏ!!! So wonderful of you to start this thread! My municipality requires a business certificate as well if weโ€™re taxed, so itโ€™s out of control!!!
Dec 30Reply
thewalkencloset
thewalkencloset @caliklassic thatโ€™s crazy! Actually, I should check on that because I wouldnโ€™t doubt Seattle would do the same. I just want this to go away.
Dec 30Reply
caliklassic
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 Iโ€™ve ever seen my even-keel accountant emotional! ๐Ÿ˜‚ Hereโ€™s what San Diego requires in case youโ€™re 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 Iโ€™ve ever found anywhere in case youโ€™re ever looking!
Dec 30Reply
thewalkencloset
thewalkencloset @caliklassic EVERYONE is up in arms over this new threshold. The IRS claims itโ€™s to give time to clarify to taxpayers, but in reality, theyโ€™re under a lot of pressure to change it. Seattle is great. Been here 20 yearsโ€ฆtoday, actually!! Ready to get out off this crazy city. And Iโ€™m totally on the hunt for a new hair stylist! Mine keep leaving! I need to cut my pandemic hair! Haha!
Dec 30Reply
caliklassic
caliklassic @thewalkencloset ๐Ÿ’ฏ!!! Well, Iโ€™m certainly glad youโ€™re so clued in! I was in the dark until I saw a Posher like you post a listing about it early this year and hadnโ€™t heard the update. Truly appreciate you helping all of us help ourselves by sharing your intel! Your listing made my year!! For hair, couldnโ€™t more highly recommend Devan White at Shine in the Market (right outside Pike Place) if sheโ€™s still thereโ€ฆ
Dec 31Reply
thewalkencloset
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, โ€œWhat? Why?โ€ and looked it up. Poshmark didnโ€™t ever send me anything about it until they required my SSN to print a shipping label last January. And thanks for the recommendation! Iโ€™ll definitely check her out! ๐Ÿ˜Š
Dec 31Reply
caliklassic
caliklassic Yeah, what is UP with that?! I was reading some about that in the thread. Posh doesnโ€™t 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 Posherโ€™s post about this early on. NOT cool we have to find out from other platforms and each other!
Dec 31Reply
caliklassic
caliklassic And you are soooo welcome! Hope the recommendation works and you do something special for yourself on for your 20th anniversary today!! ๐Ÿฅณ
Dec 31Reply
caliklassic
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 donโ€™t need it for us everyday people who were just trying to make a little ๐Ÿ’ต???
Dec 31Reply
clean4cash
clean4cash @caliklassic idk, canโ€™t hurt to ask! Iโ€™m sure weโ€™d all be happy to have them delete them!
Dec 31Reply
caliklassic
caliklassic @clean4cash Iโ€™ll email and see if I can get a helpful response, or even any response!
Dec 31Reply
clean4cash
clean4cash @caliklassic awesome! Thank you, do share what you learn!
Dec 31Reply
caliklassic
caliklassic @clean4cash ๐Ÿ’ฏ!!!! Thank YOU! I absolutely will.
Dec 31Reply
clean4cash
clean4cash @caliklassic haha, I went in to see if I could delete it and nope, that didnโ€™t work. ๐Ÿ‘Ž๐Ÿป
Dec 31Reply
thewalkencloset
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 canโ€™t. I doubt they will let you delete it after youโ€™ve 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 donโ€™t think they will. ๐Ÿ˜•
Dec 31Reply
clean4cash
clean4cash @thewalkencloset yep Iโ€™m sure youโ€™re right. BUT it canโ€™t hurt to ask! I canโ€™t image making 20k year! ๐Ÿคฃ๐Ÿ˜‚๐Ÿคฃ 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! Iโ€™m just glad it is staying at 600! Happy sales ladies! Make it a great yearโ€ฆ just under 20k! ๐Ÿ˜˜๐Ÿ’ƒ๐Ÿ˜˜๐ŸŽŠ
Dec 31Reply
caliklassic
caliklassic @thewalkencloset That wouldnโ€™t surprise me. :/ Iโ€™m sure your right. I made my case earlier and will see what they say!
Dec 31Reply
caliklassic
caliklassic *youโ€™re right
Dec 31Reply
caliklassic
caliklassic @clean4cash Hey, if I can make it to 20K, Iโ€™ll keep on going ๐Ÿ‘๐Ÿคฉ
Dec 31Reply
caliklassic
caliklassic @clean4cash Me too ๐Ÿคฃ ๐Ÿคฆ๐Ÿปโ€โ™€๏ธ ๐Ÿ™…๐Ÿปโ€โ™€๏ธ
Dec 31Reply
thewalkencloset
thewalkencloset @caliklassic @clean4cash right?! If I can clear 20k in sales a year, Iโ€™ll deal with the tax issue! But for $600?! Hell no.
Dec 31Reply
caliklassic
caliklassic I guess I hoped Posh would give us the option to delete since itโ€™s no longer required, but who knows what theyโ€™re legally bound to do vs do as goodwill
Dec 31Reply
clean4cash
clean4cash @thewalkencloset yes, ladies yโ€™all are so right! $600 is just ridiculously low for cleaning out our closets. Heck, very little makes it to my bank to begin with.๐Ÿคฃ๐Ÿ˜‚๐Ÿคฃ๐Ÿคช๐Ÿ’ƒ๐Ÿ’ƒ
Dec 31Reply
caliklassic
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 ๐Ÿคฏ
Dec 31Reply
caliklassic
caliklassic @thewalkencloset HELL ๐Ÿšซ!!! I kept going at the urging of my accountant to โ€œsell as much as possibleโ€ since I didnโ€™t know about the taxes until after I crossed the threshold, like so many others here!
Dec 31Reply
caliklassic
caliklassic @clean4cash Same!! I keep finding so many listings on here for items I never knew I needed ๐Ÿซฃ ๐Ÿ™ˆ
Dec 31Reply
845collections
845collections Thank you for posting this!! Happy New Year!
Jan 01Reply
379_vintage
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.
Jan 01Reply
benjibargainbin
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.
Jan 02Reply
thewalkencloset
thewalkencloset @charismabc I hope youโ€™re right! Iโ€™ll check it out. Thank you!
Jan 03Reply
thewalkencloset
thewalkencloset @cutiebearaa they still request it because the $600 threshold still applies to 2023, unless repealed.
Jan 03Reply
jensthriftique
jensthriftique Iโ€™m unable to print my label now still in 2023 without providing my social! This is wrong !
Jan 03Reply
caliklassic
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.
Jan 05Reply
caliklassic
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.
Jan 05Reply
caliklassic
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.
Jan 05Reply
caliklassic
caliklassic @clean4cash Doesn't answer the question I asked but at least it's a reply from Posh!
Jan 05Reply
thewalkencloset
thewalkencloset @caliklassic awesome! Thank you for sharing this. Itโ€™s more than I wouldโ€™ve expected but certainly less than whatโ€™s needed. Frankly, I donโ€™t see anything changing other than we wonโ€™t be seeing 1099-K forms in the mail for 2022. Which IS a big deal but SSNs will still be requested.
Jan 05Reply
caliklassic
caliklassic @thewalkencloset Youโ€™re 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!! ๐Ÿฅฐ
Jan 05Reply
thewalkencloset
thewalkencloset @caliklassic aww, youโ€™re 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 Iโ€™m going to link in my next comment.
Jan 05Reply
thewalkencloset
thewalkencloset @caliklassic Iโ€™m sorry, charismabc posted it. Iโ€™ll share.
Jan 05Reply
thewalkencloset
thewalkencloset @charismabc thank you! Iโ€™m 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
Jan 05Reply
caliklassic
caliklassic @thewalkencloset ๐Ÿ™๐Ÿคฉ๐Ÿ†
Jan 05Reply
clean4cash
clean4cash @caliklassic Iโ€™m sorry, Iโ€™m not finding the question that you asked me but Iโ€™m not finding. I am glad someone was able to get you and answer.
Jan 05Reply
caliklassic
caliklassic @clean4cash So sorry for the confusion! I meant Posh didnโ€™t 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! ๐Ÿ™โค๏ธ
Jan 05Reply
caliklassic
caliklassic @clean4cash I see how my comment wasnโ€™t clear, apologies! ๐Ÿ™ˆ
Jan 05Reply
clean4cash
clean4cash @caliklassic ๐Ÿคฃ๐Ÿคฃ๐Ÿ˜ then I reread my response ๐Ÿคฆ๐Ÿผโ€โ™€๏ธ sorry I had just woke up. Iโ€™m glad it all good either way. Reading thru this all is ๐Ÿคฏ๐Ÿคฏโ—๏ธ Iโ€™m getting an appt with my accountant!
Jan 05Reply
caliklassic
caliklassic @clean4cash All good! ๐Ÿ’ฏ๐Ÿคฃ
Jan 05Reply
thewalkencloset
thewalkencloset @stud_stuff yes, I posted that updated 12.23.22 in the description. Thank you for contributing! ๐Ÿ™‚
Jan 07Reply
lookather
lookather I have got to share this with my followers. Good to know info AND well written. Thanks ALOT๐Ÿ˜๐Ÿ™
Jan 09Reply
thewalkencloset
thewalkencloset @lookather thank you! The more you know! ๐Ÿ’ซ ๐Ÿ˜‰ I love your closet! ๐Ÿ˜
Jan 09Reply
lookather
lookather @thewalkencloset Thank you and many blessings for you to have a MARVELOUS New Year!
Jan 09Reply
hiendmerch
hiendmerch 15 year experience tax consultant here. Thanks for posting this! Happy to answer any questions.
Jan 09Reply
americausa1213
americausa1213 @thewalkencloset Hi Iโ€™m 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!
Jan 10Reply
thewalkencloset
thewalkencloset @americausa1213 first, welcome to Poshmark! ๐Ÿ˜Š 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, youโ€™d only receive one if you make +$600 in the tax year. Youโ€™ll find lots of info throughout the comments as well. I wish you success with Poshmark this year but track all of your expenses & receipts.
Jan 10Reply
thewalkencloset
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 donโ€™t have many receipts for things Iโ€™m selling that Iโ€™ve owned for years. Ex: I bought a sweater 10+ years ago for $60 (donโ€™t have the receipt anymore). I sell for $20 & I deduct that income from my gross reported on the form. What happens during an audit?
Jan 10Reply
americausa1213
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
Jan 10Reply
thewalkencloset
thewalkencloset @americausa1213 if youโ€™ve sold more then $600, you have submitted your SSN to Poshmark already. You do not have to anything else. Poshmark wonโ€™t 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, youโ€™ll automatically receive a 1099-K sometime in January 2024 via download. You so not need to request it. Exact date in 2024 is unknown.
Jan 10Reply
thewalkencloset
thewalkencloset @americausa1213 *do* not need to request it.
Jan 10Reply
americausa1213
americausa1213 @thewalkencloset Thank you so much! I was a little concerned about it, now I got it ๐Ÿ˜Š Have a blessed day!
Jan 10Reply
alycerancour
alycerancour Lots of poshers stopped selling because of this! Itโ€™s pathetic that this regime government of idiots are aloud to tax people for selling used items which have already been taxedโ€ฆhonestly itโ€™s sad but Honestly I have a great accountant so I pay THEE LEAST AMOUNT Due TO THE FACTS ITS EXPENSIVE TO RUN S TINY BUSINESSโ€ฆ Good Luck everyone I hope you all can stay in business! I love Poshmark the people ARE awesome!
Jan 11Reply
sondrabydesign
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, isnโ€™t this one of the reasons we separated from England, taxes on top of taxes?
Jan 12Reply
bubbles1971
bubbles1971 @sondrabydesign Account settings/vacation hold and put a date-
Jan 15Reply
bubbles1971
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 soon๐Ÿ˜. 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!
Jan 15Reply
bohemiandreams2
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
Jan 21Reply
bohemiandreams2
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
Jan 21Reply
alycerancour
alycerancour @bohemiandreams2 exactly ๐Ÿ˜‰
Jan 21Reply
bubbles1971
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
Jan 21Reply
msstinks
msstinks Sad hope they fix back to 20k - We shouldnโ€™t 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.
Jan 22Reply
thewalkencloset
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 youโ€™ve made the sale that puts you over, you go to print the shipping label but canโ€™t until youโ€™ve entered your SSN.
Jan 25Reply
spowers888
spowers888 @thewalkencloset @hiendmerch Hi there, Iโ€™m 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.
Jan 25Reply
spowers888
spowers888 @thewalkencloset @hiendmerch However, when I contacted Poshmark earlier this week concerning when I would be receiving my 1099K electronically (I didnโ€™t 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 Poshmarkโ€™s part? I want to file my taxes, but donโ€™t 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!
Jan 25Reply
thequeenlife
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?
Jan 28Reply
thewalkencloset
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. ๐Ÿคž
Jan 28Reply
thequeenlife
thequeenlife @thewalkencloset What a relief to know this! Thank you so much for the info! I donโ€™t 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, etcโ€ฆ All this & more add up to a lot of expenses that would need to be deducted before any profit could be determined.
Jan 28Reply
byvytran
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!!
Jan 29Reply
thewalkencloset
thewalkencloset @byvytran good question. Iโ€™m not a CPA but what I do know is that anything you sell, will be reported as gross income in the 1099-K. Ideally, weโ€™d have receipts for everything that we ever sell but we donโ€™t, especially gifts. Iโ€™ve basically asked that question here a few weeks ago & I havenโ€™t received a response from the CPA who commented. I know you can claim gifts but Iโ€™m not sure how it works in this situation where you then sold them.
Jan 29Reply
bubbles1971
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"
Jan 30Reply
thewalkencloset
thewalkencloset @bubbles1971 fingers crossed that it passes!
Jan 30Reply
erod351
erod351 Thank you so much for this. I did not know about the canceled orders thing.
Jan 31Reply
cyndidawn
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?
Feb 01Reply
threadthepast
threadthepast @thewalkencloset if they delayed the rule for 2022, why did Poshmark still send me a 1099K I wonder? Iโ€™m confused. Do I still need to claim this now that the rules have changed? Anybody know? I canโ€™t get an answer, ugh. I am under 20,000
Feb 04Reply
thewalkencloset
thewalkencloset @cyndidawn Iโ€™m not aware of an easy way to do it other then manually by sorting columns in an excel spreadsheet.
Feb 04Reply
thewalkencloset
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 itโ€™s from Poshmark?
Feb 04Reply
threadthepast
threadthepast @thewalkencloset so I guess itโ€™s based on the state I live in! VA has a reporting amount of 600$??? Iโ€™m concerned and confused because the amount on my 1099k is way off from my earnings on my sales report. I donโ€™t think it will be profitable for me anymore. Iโ€™m sad!
Feb 05Reply
thewalkencloset
thewalkencloset @threadthepast If itโ€™s higher than your earnings itโ€™s because itโ€™s 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, youโ€™ll 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 shouldnโ€™t be required to by VA or federal.
Feb 06Reply
threadthepast
threadthepast @thewalkencloset Really? Iโ€™ve been so stressed over all this. Iโ€™ve 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!!! ๐Ÿ™I wish poshmark would just give you a more user friendly sales report; itโ€™s a lot to sort through.
Feb 06Reply
thewalkencloset
thewalkencloset @threadthepast youโ€™re very welcome. ๐Ÿ™‚ I honestly donโ€™t believe you have to worry about the 2022 1099-K but best to check with an accountant. I havenโ€™t 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. Iโ€™ll mention the reports at the next show.
Feb 06Reply
thewalkencloset
thewalkencloset @threadthepast I love the variety of your closet! Beautifully curated! I also grew up in VA. I went to JMU. Itโ€™s still home but I donโ€™t miss the state income tax! ๐Ÿ˜‚
Feb 06Reply
destinymack46
destinymack46 @thewalkencloset I am so confused by all of this. So Iโ€™m 2022 I made over $1200. So I donโ€™t have to wait for them to send me a 1099K form then???
Feb 06Reply
thewalkencloset
thewalkencloset @destinymack46 the IRS has delayed the lower threshold of $600 for reporting until 2023. So you shouldnโ€™t be getting one of 2022. If you do, check with an accountant.
Feb 07Reply
susanbb23
susanbb23 Hi, I had about this, however, you explained this subject much clearer! Thank you! โค๏ธ๐Ÿ›๏ธ๐Ÿ’•
Feb 11Reply
hpeldridge
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!!!!
Feb 12Reply
pearlsbowtique
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!
Feb 15Reply
thewalkencloset
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.
Feb 15Reply
pearlsbowtique
pearlsbowtique @thewalkencloset omg look at this feed! lol
Feb 15Reply
pearlsbowtique
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. ๐Ÿ˜’
Feb 15Reply
bubbles1971
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 now๐Ÿ˜ต๐Ÿ˜
Feb 19Reply
bubbles1971
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
Feb 19Reply
kellechinparis
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!
Feb 21Reply
thewalkencloset
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. Itโ€™s a pain. But the $600 includes more then just what you pocket.
Feb 21Reply
tammyreneealsob
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.
Mar 01Reply
thewalkencloset
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 thatโ€™s what you pay taxes on.
Mar 01Reply
tammyreneealsob
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
Mar 01Reply
thewalkencloset
thewalkencloset @tammyreneealsob sorry I wasnโ€™t 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! ๐Ÿ™‚
Mar 01Reply
tammyreneealsob
tammyreneealsob I am SELLING THE necklace. Not buying it
Mar 01Reply
thewalkencloset
thewalkencloset @tammyreneealsob I understand that. I know that. Please reread my last comment with the example. If you need more clarification, let me know.
Mar 01Reply
tammyreneealsob
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 ?
Mar 01Reply
thewalkencloset
thewalkencloset @tammyreneealsob on the surface, yes, youโ€™re correct. However, Iโ€™m not sure how the rules apply if it was a gift. Youโ€™d 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.
Mar 01Reply
lulusfringe
lulusfringe Thank You for sharing this ๐Ÿ’œAnd your closet is beautiful!๐Ÿ˜
Mar 12Reply
thewalkencloset
thewalkencloset @lulusfringe aww, thank you! Congrats on being a featured closet today! I loved your closet. โ˜บ๏ธ
Mar 12Reply
lulusfringe
lulusfringe @thewalkencloset Awww! ๐Ÿฅฐ๐Ÿ™TYSM! That means so much to me๐Ÿ’œ
Mar 12Reply
jscalabrino
jscalabrino so when I sell back an item bought at the store, does IRS reimburse me the sales tax? ๐Ÿ˜ฌ
Mar 21Reply
thewalkencloset
thewalkencloset @jscalabrino technically? Yes! You deduct it along with the retail and shipping costs when you file your taxes. ๐Ÿ˜Ž
Mar 21Reply
princessbrooks7
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!
Mar 27Reply
thewalkencloset
thewalkencloset @princessbrooks7 the sales report doesnโ€™t 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 profitโ€”the 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.
Mar 27Reply
princessbrooks7
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.
Mar 27Reply
thewalkencloset
thewalkencloset @princessbrooks7 there is no easy way to do it other than to go through each sale under โ€œMy 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. Iโ€™m actually going to ping a couple sellers who are businesses and see how theyโ€™ve always done it.
Mar 27Reply
lovebirds212216
lovebirds212216 Hi ! I didnโ€™t 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
Mar 30Reply
thewalkencloset
thewalkencloset @lovebirds212216 you shouldnโ€™t 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, Iโ€™m 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!
Mar 30Reply
lovebirds212216
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. Itโ€™s for 2023
Mar 30Reply
thewalkencloset
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, youโ€™ll 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.
Mar 30Reply
lovebirds212216
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 ?
Mar 30Reply
lovebirds212216
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
Mar 30Reply
anniepapz
anniepapz @thewalkencloset I am confused about the cancellation part. I cancelled an order that put me over the threshold. Since Iโ€™ve done that, the redemption history would show I only made under $600 for the year - can that be used to show I actually didnโ€™t go over the $600 threshold? If Iโ€™ve only made $400?
Apr 03Reply
thewalkencloset
thewalkencloset @lovebirds212216 sorry I missed this. But the answer is not helpful: I donโ€™t 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
Apr 03Reply
thewalkencloset
thewalkencloset @lovebirds212216 agreed. It sucks. It was changed in the American Rescue Act in 2021 by the Biden admin. Ironicโ€ฆโ€ Rescue.โ€ โ€œWe wonโ€™t raise taxes on anyone making less than $400K a year.โ€ I make WAY less than that. Thanks, Joe. ๐Ÿคจ
Apr 03Reply
thewalkencloset
thewalkencloset @anniepapz they donโ€™t 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, donโ€™t bother canceling orders to stop a 1099K coming your way in 2024 for this tax year.
Apr 03Reply
anniepapz
anniepapz @thewalkencloset but if I canceled it and donโ€™t make a sale and I deduct that from my gross, I am not paying the tax on it, correct?
Apr 03Reply
thewalkencloset
thewalkencloset @anniepapz correct, if you deduct it from your gross when youโ€™re filling your taxes, you wonโ€™t be paying taxes on it.
Apr 03Reply
thewalkencloset
thewalkencloset @gamer_princess a lot of info in the comments
Apr 06Reply
tracyheather
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 didnโ€™t make anything on the cancellation.
Apr 08Reply
thewalkencloset
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 โ€œexpense.โ€ Iโ€™m convinced itโ€™s so they bring in more money when people donโ€™t deduct them as expenses. Because, you knowโ€ฆgovernment! ๐Ÿ™„
Apr 08Reply
fiore_amore
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?)
Apr 11Reply
thewalkencloset
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, youโ€™ll 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.
Apr 12Reply
angel_apparel18
angel_apparel18 @thewalkencloset this is sooo confusing, Iโ€™m literally so nervous to file tax OMg.
Apr 15Reply
angel_apparel18
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? Iโ€™m very confused on what you said about the deduction of shipping fees and taxes? Isnโ€™t that already payed but the buyer and taken out and not counted toward our taxes?
Apr 15Reply
angel_apparel18
angel_apparel18 @thewalkencloset hey Iโ€™m 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?
Apr 17Reply
thewalkencloset
thewalkencloset @angel_apparel18 From digital.com: "Form 1099-K doesnโ€™t 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."
Apr 17Reply
thewalkencloset
thewalkencloset @angel_apparel18 you have to deduct shipping, discounts, PM fee, canceled orders, and the amount you paid for the item(s) that sold.
Apr 17Reply
angel_apparel18
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 didnโ€™t have the time and you really helped me a lot and I really appreciate it
Apr 17Reply
thewalkencloset
thewalkencloset @angel_apparel18 Iโ€™m sorry to hear that. But remember, you donโ€™t need to file for selling on PM for 2022 but you will for this year when you file your taxes next year. Iโ€™m so glad you found the help you needed. ๐Ÿ˜Š
Apr 17Reply
angel_apparel18
angel_apparel18 @thewalkencloset donโ€™t we have to file for a section c self employment form anything made over 400?
Apr 17Reply
thewalkencloset
thewalkencloset @angel_apparel18 Iโ€™m 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.
Apr 19Reply
since_forever5
since_forever5 ๐Ÿ™ very helpful
May 08Reply
thewalkencloset
thewalkencloset @since_forever5 Iโ€™m glad you found this helpful! Thereโ€™s a ton of info in these comments too. If you have any questions, please reach out. ๐Ÿ™‚
May 08Reply
pharmgyrl
pharmgyrl @thewalkencloset Iโ€™m also closing!! For me itโ€™s not only the taxes but the lion ballers are horrible!! I do better on another platform although I still pay the taxesโ€ฆbetter decorum! Poshmark has become a low ball garage sale!
Jun 03Reply
thewalkencloset
thewalkencloset @pharmgyrl420 and thatโ€™s why my sales have slowedโ€ฆbecause I wonโ€™t accept all of the low ball offers. Iโ€™ve 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 itโ€™s more difficult to make sales. I hear you.
Jun 04Reply
dosojosverdes
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... ๐Ÿ’”๐Ÿ’”๐Ÿ’” I think this means: I must close my closet nowโ—
Jun 21Reply
dosojosverdes
dosojosverdes @thewalkencloset ... cont'd... I am using Poshmark to keep busy/distracted from my grieving process ~~~ I am sick ๐Ÿ˜ฃ๐Ÿ˜ฃ๐Ÿ˜ฃ๐Ÿ˜ช๐Ÿ˜ช๐Ÿ˜ช LuLu
Jun 21Reply
dosojosverdes
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 ๐Ÿ’” Thanks so much!
Jun 21Reply
dosojosverdes
dosojosverdes @pharmgyrl420.... . ... FOUND โ— ๐Ÿ˜ช๐Ÿ˜ช๐Ÿ˜ช๐Ÿ˜ช๐Ÿ˜ช
Jun 21Reply
thewalkencloset
thewalkencloset @dosojosverdes I am so sorry for your loss. Truly. I canโ€™t imagine your grief. If you need any help or support, on Poshmark or otherwise, please let me know. โค๏ธโค๏ธ
Jun 21Reply
dosojosverdes
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......
Jun 21Reply
pharmgyrl
pharmgyrl @dosojosverdes yay!!! I apologize for not seeing your post earlier as Iโ€™m rarely on pm anymore!
Jun 22Reply
pharmgyrl
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! ๐Ÿฅฐ
Jun 22Reply
suzieshanger
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.
Jul 20Reply
thewalkencloset
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 wouldnโ€™t be a big deal, but it is. As Iโ€™ve 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#
Jul 20Reply
chloe101845
chloe101845 @thewalkencloset They donโ€™t ๐Ÿ˜Š
Jul 23Reply
lovengolightly
lovengolightly ๐Ÿ’ฏ๐Ÿ‘๐Ÿผ๐Ÿ‘๐Ÿผ๐Ÿ‘๐Ÿผ๐Ÿ’ฏ๐Ÿ’ฏTHANK YOU!! Very Informative โค๏ธโค๏ธ
Aug 01Reply
thewalkencloset
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.
Aug 01Reply
dinozyne
dinozyne @thewalkencloset Hello! Itโ€™s August 2023 and I literally just found out about this as well when my last sale put me over the threshold. ๐Ÿ˜ญ Iโ€™ve 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 wonโ€™t have my SSN?
Aug 20Reply
dinozyne
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 donโ€™t have any data?
Aug 20Reply
thewalkencloset
thewalkencloset @dinozyne quick answer: youโ€™ll 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. โ€œWelcome to the club.โ€ ๐Ÿ˜ Iโ€™ll continue in the next commentโ€ฆ
Aug 20Reply
thewalkencloset
thewalkencloset @dinozyne deleting your account to get rid of your SSN, will also do nothing, Iโ€™m 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, thereโ€™s 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!***
Aug 20Reply
dinozyne
dinozyne @thewalkencloset Aw it sucks that we have to find out about this in this way ๐Ÿ˜ญ thank you for clarifying. I guess Iโ€™ll have to deal with this headache during tax season ๐Ÿ˜ญ
Aug 20Reply
shopjewelsnmore
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! ๐ŸŒน
Oct 08Reply
contentcontemp
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.
Oct 31Reply
thewalkencloset
thewalkencloset @hellonhipham yes, Iโ€™ll send you a message via your bundle. ๐Ÿ™‚
Oct 31Reply
kristyhen
kristyhen Stop voting blue!
Nov 07Reply
kristyhen
kristyhen @thewalkencloset thank joe Biden
Nov 07Reply
kristyhen
kristyhen @thewalkencloset Biden was the worst thing for this country
Nov 07Reply
kristyhen
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
Nov 07Reply
thewalkencloset
thewalkencloset @kristyhen I totally agree with your sentiments but I kindly and respectfully ask that we keep this thread as apolitical as possible. ๐Ÿ™‚ We are ALL frustrated with this tax policy & many donโ€™t know who or why it was changed (to your point). As for why? Itโ€™s government. The more it can tax you, the more it can waste. They CLAIM itโ€™s to hook the tax dodgers. ๐Ÿ™„ Going from $20k to $600 in reporting IS ridiculous.
Nov 07Reply
scralice
scralice YES girl! Iโ€™ve been voting red since 18. ๐Ÿ‘๐Ÿป
Nov 07Reply
mixon4christ
mixon4christ @kristyhen just donโ€™t file. The irs is a fraud organization anyway. ๐Ÿ˜‰
Nov 07Reply
kristyhen
kristyhen @mixon4christ lol l like the way you think!
Nov 07Reply
kristyhen
kristyhen @scralice โค๏ธโค๏ธโค๏ธ
Nov 07Reply
kristyhen
kristyhen @stacybarrett465 the people in charge of the irs changed it in 21 during the current administration
Nov 07Reply
kristyhen
kristyhen @thewalkencloset i understand keeping it apolitical here. Itโ€™s a place to share fashion and have fun. Just burns me up lol. And itโ€™s obviously a new law set by I R S under the current administration. Just want to bring light to that.
Nov 07Reply
bubbles1971
bubbles1971 IRS delays $600 reporting rule for online payments โ€” again" YYYYEEESSS!!! HOORAY!๐Ÿ˜€๐Ÿ˜๐Ÿ˜Ž๐Ÿ˜
Nov 22Reply
bubbles1971
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." ๐Ÿ˜๐Ÿ˜๐Ÿ˜๐Ÿ˜๐Ÿ˜๐Ÿ˜๐Ÿ˜๐Ÿค—
Nov 22Reply
bubbles1971
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. "
Nov 22Reply
thewalkencloset
thewalkencloset @bubbles1971 this is amazing news! Hopefully, it will be struck down in the next year or so, considering hope much theyโ€™ve changed it since 2020. ๐Ÿ™ Thank you so much for sharing!
Nov 22Reply
bubbles1971
bubbles1971 @thewalkencloset Now if only I could make some sales!! Lol been so slow
Nov 22Reply
thewalkencloset
thewalkencloset @bubbles1971 I hear you! Itโ€™s been incredibly slow for me this year. But I havenโ€™t been as active. The company I work for went through an acquisition so Iโ€™ve been busy. I havenโ€™t listed anything much this year. Iโ€™m so backed up!
Nov 23Reply
ms_quinzel
ms_quinzel @bubbles1971 That's what I read as well.
Jan 08Reply
shopfablooks
shopfablooks @luckyladybug4u donโ€™t want to give my SSN,got same thing,have been using EIN just fine,got same message,couldnโ€™t add EIN again,locked me out bc said I tried too many times,try again tomorrow,started on Saturday,tried Sunday, same thing,canโ€™t save my EIN,canโ€™t 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
Jan 23Reply
thewalkencloset
thewalkencloset @shopfablooks you might want to reach out to Poshmark Support, if you havenโ€™t already. They should be able to look into it out reset it for you.
Jan 23Reply
stardustselegy
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
Jan 27Reply
stardustselegy
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
Jan 27Reply
refinecloset188
refinecloset188 @thewalkencloset Hello! Iโ€™m new to this, and I wanted to ask what is going to happen this yearโ€ฆ so if we earn more than 600 USD this year, say until the end of Dec 2024, we would have to pay tax???
Jan 28Reply
thewalkencloset
thewalkencloset @elegyfordreams I do a lot of impulsive buying too and have tons to sell but $5K threshold is still too low for me. ๐Ÿ˜‰ And I agree, this is a money grab. The irony? This came out of the American Rescue Act. Whoops. ๐Ÿ˜’
Jan 28Reply
thewalkencloset
thewalkencloset @gocabinets666 welcome to Poshmark! As it currently stands, yes, youโ€™ll have to pay taxes on sales over $600. But theyโ€™ve 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.
Jan 28Reply
refinecloset188
refinecloset188 @thewalkencloset thank you so much for explaining!! I really hope they delay it too ๐Ÿฅฒ
Jan 28Reply
stardustselegy
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'
Jan 28Reply
stardustselegy
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
Jan 28Reply
rsiem
rsiem @elegyfordreams you also have to have had over 200 or more in transactions. Itโ€™s AND not OR. Hope that helps
Jan 28Reply
shoper1977
shoper1977 @elegyfordreams hi there So if we sell more then $5,000 this year will get a 1099 next year ?
Jan 28Reply
shoper1977
shoper1977 This is what found in tax section here at poshmark โ€œ 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.
Jan 28Reply
kimbyer24
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
Jan 31Reply
thewalkencloset
thewalkencloset @kimbyer24 that means youโ€™ve hit the magical $600 in sales annually and now youโ€™re caught in the tax trap. In order to print the shipping label, you need to enter your SSN. And canceling wonโ€™t 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.
Feb 01Reply
kimbyer24
kimbyer24 Thanks so much
Feb 01Reply
tuesdai_noelle
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 :-)
Feb 01Reply
actuallyvintage
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!
Feb 04Reply
miner48
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?
Feb 04Reply
thewalkencloset
thewalkencloset @tuesdai_noelle if you havenโ€™t been prompted to enter your SSN, then you havenโ€™t hit the threshold yet. Unless you surpassed the selling threshold of $20K & 200+ transactions in 2023, youโ€™re not going to get a 1099K sent to you by Poshmark for this tax filing season. If you sell $5K in 2024, youโ€™ll get a 1099K in early 2025 to file your 2024 taxes.
Feb 05Reply
thewalkencloset
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 youโ€™re 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.
Feb 05Reply
thewalkencloset
thewalkencloset @actuallyvintage 20K threshold applied to the 2023 tax year so unless you sold that much, you wonโ€™t get a 1099K from Poshmark this filing season. The $5K threshold applies to 2024. So thatโ€™s good news for you because you donโ€™t have to wait on the 1099K to file your taxes now.
Feb 05Reply
actuallyvintage
actuallyvintage @thewalkencloset Thank you! Yes, I did realize after commenting that I had 200+ sales for 2023, but hadnโ€™t 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 ๐Ÿ˜Š
Feb 05Reply
thewalkencloset
thewalkencloset @miner48 yes, the $5K threshold is for 2024. Once you meet that threshold, if Poshmark doesnโ€™t already have your SSN, youโ€™ll 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.
Feb 05Reply
thewalkencloset
thewalkencloset @actuallyvintage youโ€™re welcome! ๐Ÿ˜Š
Feb 05Reply
tuesdai_noelle
tuesdai_noelle @thewalkencloset Thank you so much for responding. All of the information of both replies has been most helpful!
Feb 05Reply
marlo7
marlo7 Thank you for being so thoughtful and posting this info๐ŸŒบ
Feb 08Reply
saucyandsassy
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.
Feb 22Reply
izeandirie
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 ๐Ÿ˜ซ and if youโ€™re from the below states - theyโ€™ll 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
Feb 22Reply
thewalkencloset
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...
Feb 23Reply
angel_apparel18
angel_apparel18 @izeandirie I told thot to my tax rep and she said thatโ€™s not true and I live in ma
Feb 23Reply
thewalkencloset
thewalkencloset @angel_apparel18 wow, sounds like you better find someone else to do your taxes! Thanks again for the info!
Feb 23Reply
marchild_ja
marchild_ja Thank you for sharing this info!
Feb 23Reply
shoper1977
shoper1977 Thank you for the update
Feb 23Reply
izeandirie
izeandirie @angel_apparel18 you may be correct- reading more into this. Looks like you donโ€™t have to report to the IRS but have to submit the form to the DOR (Dept of Revenue) โ€œWhere 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€
Feb 23Reply
angel_apparel18
angel_apparel18 @izeandirie yes that sounds right, my irs agent told me I donโ€™t have to pay a tax on those but I definitely should always report my earning
Feb 23Reply
angel_apparel18
angel_apparel18 @thewalkencloset no my tax agent is very good, as shown by the reply from the girl that said that. You donโ€™t 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 arenโ€™t taxable
Feb 23Reply
hansuzcloset
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?
Mar 02Reply
thewalkencloset
thewalkencloset @hansuzcloset I canโ€™t 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 wonโ€™t pay taxes but that means tracking expenses, Original receipts, etc.
Mar 02Reply
thewalkencloset
thewalkencloset @hansuzcloset If youโ€™re not making a profit in sales after deducting Original costs for each item, you wonโ€™t pay taxes on those sales. Therefore, I say itโ€™s 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 youโ€™ll pay taxes on the reported income on the form.
Mar 02Reply
hansuzcloset
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?
Mar 02Reply
proverbs19_17
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
Mar 06Reply
thewalkencloset
thewalkencloset @hansuzcloset if you ever are audited, youโ€™ll need receipts to prove your deducted amounts. Otherwise, use โ€œreasonableโ€ 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.
Mar 06Reply
thewalkencloset
thewalkencloset @proverbs19_17 quick answer: yes, the gross amount will include the shipping and taxes paid by the buyer. Itโ€™s ridiculous but youโ€™ll 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.
Mar 06Reply
mrsb_0611
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 Iโ€™ll just open a new closet. Isnโ€™t that an option too? Iโ€™ve seen people with multiple closets&ambassadors. Iโ€™m wondering now if thatโ€™s 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.
Mar 10Reply
mrsb_0611
mrsb_0611 @izeandirie I couldnโ€™t find the breakdown of states and Posh wouldnโ€™t respond to emails for clarification. Just to be certain, is TX $20k a year or $600? I greatly appreciate your help! Thank you ๐Ÿ˜Š
Mar 10Reply
izeandirie
izeandirie @mrsb_0611 hi! This is what i saw online - โ€œThe 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€
Mar 10Reply
mrsb_0611
mrsb_0611 @izeandirie Ugh ๐Ÿ˜ฉ Thank you. Itโ€™s the federal reporting that is the killer especially when Iโ€™ve paid taxes on these items once. I appreciate your response!
Mar 10Reply
izeandirie
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.
Mar 10Reply
izeandirie
izeandirie @mrsb_0611 And then thereโ€™s 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 didnโ€™t have evidence to support my deduction. I made about 6.5k if it helps.
Mar 10Reply
mrsb_0611
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!!
Mar 10Reply
thewalkencloset
thewalkencloset @mrsb_0611 hi! Since @izeandirie addressed many aspects of your questions, Iโ€™ll answer to the SSN part. Even if you donโ€™t give it to Poshmark, if you trigger the requirement for a 1099K from Poshmark, youโ€™ll still get the 1099K. From what Iโ€™ve read, it will be based on your address and it will be an estimated gross (less accurate) than if they had your SSN. So thereโ€™s no point in opening multiple closets for that purpose.
Mar 10Reply
bubbles1971
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
Sep 24Reply
bubbles1971
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"
Sep 24Reply
thewalkencloset
thewalkencloset @bubbles1971 I second that. Iโ€™ve hardly sold anything this year. Itโ€™s crazy!
Sep 24Reply

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thewalkencloset

@thewalkencloset

Last Active: 8 hours ago

Seattle, WA
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About the seller

thewalkencloset

@thewalkencloset

Last Active: 8 hours ago

Seattle, WA
View Closet

2882

Listings

1500+

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1 day

Avg. Ship time

100+

Love Notes