Do I really need to pay taxes on my Venmo and PayPal transactions now?

Taxes

I sell stuff on Facebook marketplace and Poshmark as a side hustle, probably make around -4k a year. I heard theres some new rule where PayPal and Venmo report everything to the IRS now? My friend said I could owe thousands in taxes. Is this true? Im kinda freaking out because I never reported this income before and I dont even know how to track it all.

Emily Johnson

3 Answers

Best -->

Okay dont freak out. Heres the deal:

The new rule (1099-K reporting threshold) was supposed to be but the IRS keeps delaying it. For 2024 its still ,000 and going forward its supposed to phase down. But heres the thing - you were technically always supposed to report this income, the IRS just didnt know about it before.

For -4k in sales you probably dont owe much because you can deduct:

What you originally paid for the items

Shipping costs

Selling fees

Packing materials

If youre selling used personal items for less than you paid, thats not even taxable income - its a loss. Only profits are taxed.

Going forward, keep a spreadsheet: what you sold, what you paid for it, what you sold it for, fees. If youre actually making profit, yes you owe taxes on that profit, but probably not "thousands" unless youre selling way more than you mentioned.

Ryan Robinson

The 1099-K threshold keeps getting delayed. But technically you always owed taxes on profit. If youre selling used stuff for less than you paid, thats not profit. Only worry if youre actually making money consistently.

Andrew Jackson

Started tracking my Poshmark sales in a spreadsheet. Cost basis (what I paid), selling price, fees, shipping. Most months Im barely breaking even or at a loss so theres nothing to tax anyway.