Poshmark and Mercari Taxes in 2026: A Reseller's Guide

Reselling for profit is a business

There is a real line between two activities that look identical from the outside. Selling your own used clothes for less than you paid is not taxable, and the loss is not deductible. Buying inventory to resell for profit, as an ongoing activity, is a business: the profit goes on Schedule C, you owe self-employment tax on it, and in exchange you deduct your costs. The IRS weighs factors like businesslike record-keeping, the time you put in, and whether you operate to make a profit. A regular sourcing-and-listing operation is a business even if it is part-time. The general personal-versus-business framework, and how to handle a 1099-K for personal items, is covered in our eBay and reseller taxes guide. This guide is for the for-profit flipper.

The current fees, because they changed

The two platforms charge sellers differently, and Mercari’s number is the one people get wrong:

• Poshmark. A flat $2.95 on sales under $15, and 20% on sales of $15 or more. The commission is all-inclusive and covers the prepaid USPS label.
• Mercari. A flat 10% seller fee, reinstated on January 6, 2025 after a period in 2024 when selling was free for sellers. Mercari removed the separate seller payment-processing fee at the same time, so 10% is the whole seller-side number. The buyer pays a separate fee that does not touch your earnings.

Whichever platform you use, the fee it keeps is a deductible business expense. Our calculators subtract it for you when you enter your gross sales, so the tax estimate is built on what you actually keep.

Cost of goods sold is the whole ballgame

The deduction that decides a reseller’s tax bill is cost of goods sold: what you paid to acquire the items you sold this year. You are taxed on the gain, not the sale price. A jacket you thrifted for $6 and sold for $48 is taxed on the profit after fees, not on the $48. Skip this and you are effectively taxed on your gross sales, which can double what you owe.

Two rules trip people up. First, COGS counts only for items that actually sold during the year; the $400 of inventory still sitting in bins is not deductible until it sells. Second, you need item-level cost basis to claim it, which means a record of what you paid for each piece. Most resellers keep a simple spreadsheet or an inventory app with the date sourced, the cost, and the sale details. It is the least glamorous part of reselling and the most valuable at tax time.

The other deductions stack on top of COGS:

• Shipping you pay.On Poshmark the buyer’s label is covered by the fee, but any shipping you cover, and Mercari’s label costs where you absorb them, are deductible.
• Packaging supplies. Poly mailers, boxes, tissue, tape, and thank-you cards.
• Sourcing mileage. Miles driven to thrift stores, estate sales, and the post office are deductible at the 2026 rate of 72.5 cents per business mile if you keep a log.
• Home office and supplies, where you have a dedicated space for photographing, storing, and shipping inventory.

The 1099-K, sales tax, and what is taxable

Both platforms issue a Form 1099-K once you cross the federal threshold of more than $20,000 in gross sales and more than 200 transactions, the pre-2021 figures restored by the One Big Beautiful Bill Act. Many states report at far lower amounts, so do not treat a missing form as proof you owe nothing; your income is taxable from the first dollar of profit either way. The 1099-K reports gross sales before fees, so reconcile it against your own records, not your payouts. Our 1099-K guide covers the form in depth.

Sales tax is handled for you. Under marketplace facilitator laws, both Poshmark and Mercari collect and remit sales tax on the orders they process, so it is added to the buyer’s total and never appears in your taxable sales.

Self-employment tax and quarterlies

Net profit on Schedule C faces two federal taxes. The first is self-employment tax: 15.3% on 92.35% of net earnings, once profit reaches $400 for the year. The second is income tax at your bracket, plus state income tax in most states. Because nothing is withheld, the IRS expects quarterly estimated payments if you will owe $1,000 or more for the year, due April 15, June 15, and September 15, 2026, then January 15, 2027. The full mechanics are in our quarterly tax guide, and the set-aside calculator turns your expected profit into the share to save from every payout.

This guide is general information, not personalized tax advice. If you source at volume, hold significant inventory, or sell across several platforms, the bookkeeping gets real and a CPA usually pays for themselves. The numbers here are sourced from IRS publications and the platforms’ current fee pages, and are current at 2026-06-18; rates and fees change.