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Mercari taxes: what the 1099-K shows and what to report
Mercari taxes are on your profit, not your sales. Mercari's 1099-K shows your gross sales, so its number is bigger than your profit and isn't a bill for that amount. And whether or not a form arrives, money you make reselling is income you report.
What's in that 1099-K number: the item price, the shipping and the sales tax buyers paid on your completed sales.
Do you have to pay taxes on Mercari sales?
Yes, but only on the profit. A form that never arrives doesn't change that: the IRS says you must report income even without a Form 1099-K. Mercari's own tax page says it from the other side: it's the gains from online sales that are generally subject to income tax. Sell something for less than you paid and you may owe no income tax on it, even though a 1099-K lists the sale.
| What it is | Tax result | Where it goes |
|---|---|---|
| Your own item, sold for less than you paid | No tax, and the loss can't be deducted | Entry space at the top of Schedule 1, or Form 8949 with code L |
| Your own item, sold for more than you paid | The gain is taxable | Form 8949 and Schedule D |
| Bought to resell, again and again | The profit is taxable income | Schedule C, the form for business profit |
Which row is yours? A personal item, in tax terms, is something you owned for personal use. Your old coat is. Thrifted jeans bought to flip aren't, even if they sit in the same Mercari shop. If you can't tell which side an item falls on, that's a question for a preparer.
Does Mercari report to the IRS, and when do you get a 1099-K?
Yes, once you meet the federal threshold in Mercari's 1099-K FAQ (updated August 2025). Mercari then files a Form 1099-K with the IRS and any state tax authority that requires one, and gives you a copy by January 31. The threshold is two tests, one on gross dollars and one on transaction count, and you have to pass both. The 1099-K threshold, year by year has the figure for your year.
So how much can you sell on Mercari before paying taxes? No amount decides it. Tax is on profit, and the threshold decides only whether Mercari files a form. Below it, you still report your profit. Above it, you aren't taxed on the gross. Some states set their own thresholds (Mercari's policy page).
Mercari counts a sale in the year it completes, not the year it sold. A sale completes when you rate the order, or when Mercari rates it for you after a set time. Mercari's own example is an item bought in late December whose order completes in January: it lands on the form for that January. Cut your own records by completion date too, or they won't match, and ask your preparer which year such a sale belongs to on your return.
The form follows your account. Mercari's policy page says the tax reporting information is associated with, and reported at, your account.
How do you use Mercari's Tax Center?
Mercari's Tax Center is where you submit and update your tax details, and where the form waits for you. Find it at Settings > Tax Center in your account. The W-9 you fill out there asks for a legal name, a taxpayer identification number, an address and a tax classification, and you choose electronic or paper delivery of your 1099-K when you submit it.
- Mercari may ask for your W-9 before you reach the threshold.
- If you don't submit it when asked, your ability to sell may be limited. Submitting it in the Tax Center is Mercari's route back to full account functionality.
- Updates for the prior year must be accepted by January 7. Later ones apply to the next year.
- If you get a 1099-K, you can download it there by January 31.
Those are the dates Mercari's pages give today, so check them each January. Watch the emails, too. Mercari says it sends a reminder when it's time to submit your tax details, but a message can't prove it's real. Skip its link and open Settings > Tax Center yourself. The IRS's scam page lists pressure for personal or financial information among the signs a message could be a scam (it's written about messages that claim to be from the IRS).
What is in the number on Mercari's 1099-K?
The Mercari 1099-K counts your unadjusted gross payments for completed sales. Mercari's FAQ lists what's in and out:
| Inside the form's gross | Not inside it |
|---|---|
| The full item price, before deductions or refunds | The buyer's service fee and payment processing fee (Mercari says since March 27, 2024) |
| Shipping the buyer paid | Canceled or refunded transactions that never completed |
| Sales tax the buyer paid | Amounts not processed through Mercari |
The form doesn't subtract your costs. Shipping you paid and Mercari's seller fees are reported as part of the gross item price, and the total isn't adjusted for credits, discounts, fees or any other amount after completion (Mercari's policy page). That includes refunds, so a refund you pay after an order completes doesn't shrink the form and needs its own line in your worksheet.
Box 1a, the box that holds the gross, is the same: it isn't adjusted for fees, credits, refunds, shipping, cash equivalents or discounts, and the IRS says those items are not taxable income. Why a 1099-K is higher than your income walks through the gap.
Does Mercari charge sales tax, and does it change your return?
The buyer pays it and Mercari handles it. Mercari adds sales tax to an order where it applies, then calculates, collects, reports and remits it for its sellers under marketplace facilitator laws (Mercari Help, Sales Tax for Buyers). Its income tax page calls sales tax and income tax two separate taxes. Where sales tax does reach your return is Box 1a, because the gross includes the sales tax a buyer paid. Ask your preparer how to treat that line. The profit example below carries it as its own.
How do you work out your Mercari profit?
Your Mercari profit is the form's gross minus what it cost you to earn it. Match Box 1a to your Sales Report first, then subtract the lines in this made-up year:
| Step | Amount |
|---|---|
| Box 1a: item prices 4,300 + buyer-paid shipping 500 + buyer-paid sales tax 200 | $5,000 |
| Minus buyer-paid sales tax Mercari remitted (ask your preparer how to treat this line) | $200 |
| Minus shipping labels you paid for | $640 |
| Minus Mercari seller fees you paid | $410 |
| Minus refunds paid after the orders completed | $120 |
| Minus the cost of the items that sold | $1,500 |
| Profit, before supplies and other expenses | $2,130 |
Check the arithmetic: 4,300 + 500 + 200 = 5,000, and 5,000 - 200 - 640 - 410 - 120 - 1,500 = 2,130. The sales-tax line is the open one. This page doesn't say whether it's income, and if your preparer treats it differently, the profit moves by that $200.
Where each line lands on Schedule C is a preparer question too. Schedule C for resellers walks the 2025 form, and how cost of goods sold works covers the cost line. Keep three things:
- Purchase receipts, or a log of what you paid and when. Mercari tells sellers to retain your purchase records.
- The Sales Report for the year, filtered to Completed.
- Your 1099-K, any corrected form, and your messages to Mercari. Keep a corrected Form 1099-K and your correspondence with the issuer, and file even if a correction hasn't arrived.
How do you report a Mercari sale at a loss?
A sale of your own item for less than you paid isn't taxed. The form still counted the sale, though, so the return needs an entry that cancels it. Picture a made-up seller who clears her closet and also flips thrift finds:
| Sale | Sold for | Paid | Result |
|---|---|---|---|
| Coat from her own closet | $45 | $80 | $35 loss, not taxed |
| Jacket she wore | $60 | $30 | $30 gain, taxed |
| Thrifted jeans, bought to resell | $55 | $8 | $47 profit, part of her business profit |
Check the arithmetic: 45 - 80 is a 35 loss, 60 - 30 is a 30 gain, and 55 - 8 is 47. Two things to notice. The loss doesn't cancel the gain, because the two are reported separately (Q4). And what you zero out for the coat isn't the 35. It's the form's figure for that sale, which counted the whole thing with its buyer-paid shipping and sales tax.
- Match each sale to your Mercari history and what you paid, then sort into three piles: your own things at a loss, your own things at a gain, and things bought to resell.
- Loss, route A: enter the amount the 1099-K reported for those sales in the entry space above Part I of the 2025 Schedule 1 (Form 1040).
- Loss, route B: on Form 8949, put the proceeds in column (d), what you paid in (e), code L in (f), and in (g) the adjustment that brings (h) to zero. The Instructions for Form 8949 (2025) explain each column.
- Gains: Form 8949 and Schedule D. The gain is what you received minus what you paid.
- More than one form: add the amounts and use the one entry space (IRS, Form 1099-K FAQs, Q6).
Older guides point to Schedule 1 lines 8z and 24z. Those lines were for 2022 and 2023; from tax years beginning in 2024, it's the entry space at the top. Look at the new form each January.
Does Mercari report to the IRS?
How much can you sell on Mercari before paying taxes?
Do I have to report Mercari income if I don't get a 1099-K?
Where do I find my Mercari tax form (1099-K)?
Is selling my old stuff on Mercari taxable?
Today, open Settings > Tax Center yourself and see what Mercari has on file, then pull the Sales Report for the year, filtered to Completed. Keep those two, with your purchase records, in front of you the next time you talk to a preparer.
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.
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