Reseller TaxesUS tax basics for people who sell online

Forms

The 1099-K, explained for resellers

5 min read

Form 1099-K is an IRS information return that reports the gross payments a card processor, payment app or online marketplace settled for you in a year. For 2025 and 2026, marketplaces send one only above $20,000 and 200 transactions. It's a starting figure to check, not a statement of what you earned.

What is a Form 1099-K, and what is it used for?

Form 1099-K is used to report payments you received for goods or services in a calendar year, from payment cards and from payment apps and online marketplaces, which the IRS calls third party settlement organizations. The issuer files it with the IRS and has to send your copy by January 31 (IRS, Understanding your Form 1099-K, reviewed June 28, 2026).

Marketplaces and payment apps have to send one for 2025 and 2026 only when your payments exceed $20,000 and your transactions exceed 200. Card processors report card payments at any amount. The 1099-K threshold for 2025 and 2026 explains how that rule came back.

Why is my 1099-K higher than my income?

Your 1099-K is higher than your income because box 1a is gross. The IRS says the gross payment amount isn't adjusted for fees, credits, refunds, shipping, cash equivalents or discounts, and that those items aren't taxable income. It also includes the full sale price of items you paid for yourself. Whether the income behind it is taxable is a separate question, covered in what's taxable when you resell.

What sits inside a 1099-K gross, and where it comes back out on the 2025 Schedule C. Source: IRS, What to do with Form 1099-K (reviewed July 27, 2026).
Inside the grossWhy it isn't profitWhere it comes out
Full sale price of each itemYou paid for the inventoryCost of goods sold, line 4
Shipping buyers paidYou passed it to a carrierPostage you paid, line 18
Marketplace and payment feesTaken before your payoutCommissions and fees, line 10
Refunds to buyersThe money went backReturns and allowances, line 2
Credits and discountsYou never received themDeducted from the gross

How do you reconcile a 1099-K?

Reconciling a 1099-K means walking box 1a down to the profit you report, one line at a time. Start from your platform's own year-end report, match its gross to the form, then take out refunds, fees, postage and the cost of the items that sold. The six steps below follow that order, and Schedule C, line by line shows where each figure lands.

  1. Download your platform's own reportsGet the full year's transaction or sales report. eBay's is the 1099-K detailed report.
  2. Match the gross firstYour report's gross sales plus shipping collected should land close to box 1a. If they don't, find out why before going further.
  3. Take out refundsRefunds are returns and allowances. Some platforms, eBay among them, already leave cancelled sales out of the gross.
  4. List fees separatelyFinal value fees, per-order fees, ad fees and payment processing are business expenses. They're inside the gross, so deducting them is how the number comes down.
  5. Subtract the postage you paidShipping buyers paid is income and the labels you bought are an expense. Report both.
  6. Apply cost of goods sold lastWhat you paid for the items that sold, often the biggest reduction. See how cost of goods sold works.

Once the figures reconcile, the 2026 reseller tax calculator turns them into an estimate of the self-employment and income tax on them.

What if you get more than one 1099-K?

Selling on more than one platform can mean more than one Form 1099-K, and the IRS says so directly. Reconcile each form to that platform's own report before you combine them, so a duplicate shows up instead of getting absorbed. If a form duplicates one you already received, the IRS says to ask the issuer for a corrected form showing zero.

What if your 1099-K is wrong?

If your 1099-K is wrong, contact the issuer, named as "Filer" in the top left corner of the form, and ask for a corrected one. The IRS can't correct it. Keep the original, the correction and your messages (IRS, What to do with Form 1099-K, reviewed July 27, 2026).

Don't wait to file. If the gross amount is wrong and no correction has come, the IRS says to enter the amount from the incorrect form in the entry space at the top of Schedule 1 (Form 1040). The 2025 Schedule 1 notes that the remaining 1099-K amounts go elsewhere on your return, depending on what they were for.

Why is my 1099-K higher than what I made?
Because box 1a is gross. It isn't reduced for fees, refunds, shipping, credits or discounts, and it includes the full price of items you had to buy. Those come out on your return, mostly on Schedule C.
What do I do with a 1099-K as a reseller?
Reconcile it to your platform's own reports, then report gross receipts on Schedule C and subtract refunds, fees, postage and cost of goods sold. Keep the reconciliation worksheet with your records.
What if my 1099-K is wrong?
Ask the issuer, named as Filer on the form, for a corrected one. The IRS can't correct it. File on time anyway and keep the original, the correction and your messages.
What is the 1099-K threshold now?
For 2025 and 2026, payment apps and marketplaces must send a 1099-K only when payments exceed $20,000 and transactions exceed 200. Card processors report at any amount. The threshold governs the form, not whether income is taxable.

Disclosure We build FlowLister and publish Reseller Taxes. FlowLister writes eBay listings from item photos, with a price taken from sold listings, and for a reseller that listing becomes part of the record of what sold. It's AI, so it misses things. It doesn't prepare taxes or keep books, and nothing on this site is tax advice.

Keep reading