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Poshmark Taxes and the 1099-K, Explained

Guide · 1,014 words · fees verified 27 August 2026

This page explains what a 1099-K is, why a marketplace issues one, and what makes the Poshmark version read the way it does. It does not tell you what to do about your own taxes, which depends on your circumstances and is a question for a tax professional rather than a selling guide.

What the form reports

A 1099-K is an information return. Payment platforms and marketplaces use it to report to the tax authorities, and to you, the payments they processed on your behalf during the year. A copy goes to both you and the IRS.

It reports gross payments processed. That means the total that flowed through before fees, before refunds and before what you originally paid for the items. It is not a statement of profit and was never designed to be one, and that single fact accounts for nearly all of the alarm people feel on receiving one.

Why the gap is unusually wide on Poshmark

Poshmark takes 20 percent on sales of $15 or more, and a flat $2.95 below that. That is the largest platform share among the major resale options, which means the gap between what a buyer paid and what reached you is wider here than almost anywhere else.

On a $100 sale, $20 went to the platform. The 1099-K is concerned with what was processed rather than with what you received, so the reported figure sits above your actual proceeds by that whole commission, repeated across every sale in the year.

Shipping is a further complication in the other direction. The buyer pays a flat $7.67 for standard shipping and the seller pays nothing for standard-weight packages, so that money passed through the transaction without ever being yours to keep or to spend.

The practical result is that a Poshmark seller's reported gross can sit substantially above anything they would recognize as income, even before the cost of the clothes is considered.

What the platform cannot know

Poshmark has no idea what your items cost you. That purchase happened before the platform was involved, often years earlier and frequently at retail, and it is usually the largest figure in the whole picture. It appears nowhere in what gets reported.

Your own records are therefore the only thing that distinguishes the reported total from anything meaningful. The useful ones are ordinary: what you paid for items and when, the commission deducted, any refunds issued, and packaging costs. Platforms generally supply statements covering fees and payouts; acquisition cost is the part only you have.

Keeping those records as you go is dramatically easier than reconstructing them in January, particularly for anyone selling items bought years earlier.

Where a selling guide should stop

Thresholds for when a form is issued are set by the tax authorities, have changed more than once in recent years, and vary by circumstance. Whether any of this affects what you owe depends on your own situation, including whether your selling is a business or occasional personal sales.

So the boundary is this: understanding what the form is and why the number looks the way it does is useful, and that is what this page is for. What to do about it is a conversation with someone qualified to have it.

Bottom line

A 1099-K reports gross payments a platform processed for you, before fees, refunds and the cost of your items, so it is an input to a tax question rather than an answer. On Poshmark the gap between that figure and your actual proceeds is unusually wide, because the platform takes 20 percent on sales of $15 and above, the largest share among the major options, and because the buyer's flat $7.67 shipping passed through transactions without ever being yours. Poshmark cannot know what your clothes cost you, so your own records are the only thing separating gross from meaningful, and what any of it means for what you owe is a question for a tax professional.

Frequently asked questions

Does Poshmark send a 1099-K?
Marketplaces and payment platforms issue 1099-K forms reporting the gross payments processed on a seller's behalf, with copies going to the seller and the tax authorities. Thresholds for issuing one are set by the tax authorities rather than by platforms and have changed more than once in recent years, so check the current position with a qualified source rather than relying on a number quoted in a guide.
Why is my Poshmark 1099-K higher than what I received?
Because it reports gross rather than net, and Poshmark's share is the largest among the major platforms at 20 percent on sales of $15 and above. Every sale therefore shows in the reported total at the full amount a buyer paid rather than at what reached your account, and the difference accumulates across a year of sales.
Is the buyer's shipping included in what gets reported?
Shipping paid by a buyer is money that moved through the transaction, and on Poshmark the buyer pays a flat $7.67 for standard shipping while the seller pays nothing for standard-weight packages. That is a sum that passed through without ever being yours to keep, which is another reason a reported gross figure can sit well above anything you would recognize as income.
Does Poshmark know what my clothes cost me?
No. Your items were bought before the platform was involved, often years earlier and frequently at retail, and that acquisition cost is usually the largest number in the whole picture. It appears nowhere in what gets reported because the platform has no way of knowing it, which is precisely why your own records matter.
Do I owe tax on selling my old clothes?
That depends on your circumstances, including whether your selling constitutes a business or occasional personal sales, and it is a question for a tax professional rather than a selling guide. What is useful to know here is that the number on the form is gross rather than profit, and that on Poshmark the gap between the two is wider than on most platforms.