1099-K Threshold Back to $20,000: What Venmo and eBay Sellers Owe
Most casual sellers won't get a 1099-K now that the threshold is back above $20,000. Tax on profit never went away, and a simple sales log keeps you covered.
In a house with a young child, there is always a shelf of things on their way out. The bouncer that mattered for one season. A stroller that now mostly collects dust in the garage. Every so often some of it gets photographed on the kitchen floor and sold to a family who needs it right now.
The payments arrive as small, pleasant notifications. Somewhere around the third one, a quieter question follows them in: does any of this count as income, and is a tax form going to show up that I wasn't expecting?
The answer to the form question has settled, and for most people clearing out a closet it is no. The income question matters more, and its answer never moved.
What Changed With the 1099-K Threshold
Form 1099-K is the report that payment apps and online marketplaces, such as PayPal, Venmo and eBay, file for payments you receive for goods and services. The IRS gets a copy, and so do you.
Before 2021, a platform only had to file one when gross payments to you went over $20,000 and you had more than 200 transactions in a calendar year.
The American Rescue Plan Act of 2021 dropped the threshold to $600, which on paper would have sent a form to almost anyone who sold a couch and a bike through an app. The IRS delayed it several times, and the $600 rule was never fully put into effect.
The back-and-forth ended with the One Big Beautiful Bill Act, signed on July 4, 2025, which retroactively reinstated the old rule: more than $20,000 in payments and more than 200 transactions. The IRS published FAQs on the reverted threshold on October 23, 2025.
Don't confuse this with a separate change: for payments made in 2026, the 1099-NEC and 1099-MISC threshold for freelance services rises from $600 to $2,000. Different forms, unrelated to your stroller.
No 1099-K Is Not the Same as No Taxable Income
When the form goes away, it feels as if the obligation went with it. I write software, and the closest analogy I have is a logging level: turning it down changes what gets recorded, not what the program does. Whether you owe tax is a separate rule, and it cares about what you gained.
The IRS says it plainly: "Even if you don't get a Form 1099-K, if you received payments for goods, services or property, you must report your income."
Income from a sale is not simply the money that landed in your account. Pay $300 for a crib, sell it for $120, and you have not earned $120; you got back part of what you spent. Pay $15 for a thrift-store jacket and sell it for $85, and something different happened. That difference is where tax comes in.
Personal payments were never in scope either. A friend paying you back for dinner, or a birthday gift marked as friends and family, is not a payment for goods or services.
Three Kinds of Seller in the IRS's Eyes
Most confusion clears once you know which kind of seller you are, which can change item by item.
Personal items sold at a loss
This is most of us, most of the time. The high chair, the treadmill that became a place to hang laundry. You bought it for your own use and sold it for less than you paid.
There is no gain, so there is no tax, and the loss can't be deducted. If one of these sales appears on a 1099-K, you can report it on Schedule 1 (Form 1040) or Form 8949 so it doesn't count as income. Either way, keep proof of what you originally paid.
Personal items sold at a gain
Less common, but real: a vintage lamp bought years ago for your own living room that now sells for more than you paid. That profit is taxable as a capital gain, reported on Form 8949 and Schedule D. The gain is the difference between what you received and what you originally paid, so the old price matters as much as the new one.
Hobby or business: selling to make money
The third kind of seller buys things to resell, or makes things to sell. Then the question is whether the IRS sees a hobby or a business. Its factors include:
- whether you carry on the activity in a businesslike way, with complete and accurate books and records;
- whether your time and effort show an intent to make a profit;
- whether you depend on the income;
- whether losses come from circumstances beyond your control, or are normal for a startup phase;
- whether you are mainly in it for personal pleasure.
No one factor decides it, though an activity that made a profit in at least three of the last five tax years is presumed to be for profit.
The label changes the math. Hobby income goes on Schedule 1 as other income, and hobby expenses can't be deducted. A business reports on Schedule C and can deduct ordinary and necessary expenses, such as platform fees, shipping, packaging and the cost of the goods. Once net self-employment earnings reach $400, self-employment tax applies too.
"Hobby" sounds like the lighter label, but in practice it means the income counts and the costs don't. If you source inventory every weekend, be honest with yourself about which one you are running.
Recordkeeping Habits That Protect You If the IRS Asks
Most of us know the April version: a laptop on the kitchen table, a half-built spreadsheet, an hour of scrolling old order confirmations to work out what a stroller cost three years ago. It works, eventually, at the price of several evenings.
Good records support the income and deductible expenses you report, and they only need to answer plain questions. What did you receive? What did you pay? What did it cost to sell?
- Capture what you paid when you list, not when you file. Search your email or card statements for the original purchase and screenshot it. If nothing exists, note what you remember and where that memory comes from.
- Tag every sale by type on the day it happens. Personal item, resale inventory or handmade; that label decides which kind of seller you were.
- Keep selling money apart from everyday money. A separate account, or at least a consistent note, stops sales from blurring into friends paying you back.
- Download each platform's sales history before the year closes and keep it all in one folder.
- Hold on to all of it for at least three years after you file. That is the general window for the IRS to assess more tax, and some situations call for longer.
Ten minutes a month is enough. The habit matters more than the tool.
State Thresholds Can Be Stricter Than the Federal One
This is usually where the small jolt comes from. You sold far less than $20,000 worth of things, and a 1099-K arrives anyway.
Some states set lower reporting thresholds of their own. As of 2026, Massachusetts, Maryland, Vermont, Virginia and the District of Columbia use a $600 state threshold. Illinois and Missouri also sit below the federal line, at amounts that vary. In any of these places, a platform may send you a 1099-K even though you are nowhere near $20,000.
The earlier logic holds in reverse. A form arriving does not create income, just as a missing form does not erase it; the figure on it is what passed through the platform, not your profit.
These rules have changed more than once. Check your state's department of revenue for the rule that applies to the year you are filing.
A Simple Income and Expense Log for Side Sellers
One row per sale, nothing clever. The rows below are made-up examples with round numbers, there only to show the arithmetic.
Sales log
| Date sold | Item | Platform | Sale price | Platform & payment fees | Shipping you paid | What you originally paid (cost basis) | Net gain or loss | Type | Proof |
|---|---|---|---|---|---|---|---|---|---|
| Example: 2026-03-14 | Outgrown stroller | Venmo, local pickup | $120 | $4 | $0 | $350 | −$234 | Personal item | Order email, listing photo |
| Example: 2026-04-02 | Thrifted wool jacket | eBay | $85 | $12 | $9 | $15 | +$49 | Resale inventory | Thrift receipt photo, order link |
| Example: 2026-05-20 | Vintage lamp, used at home for years | eBay | $180 | $24 | $20 | $60 | +$76 | Personal item | Old receipt photo, order link |
The stroller's loss isn't deductible. The jacket was bought to resell, so it falls under the hobby-or-business question. The lamp is a personal item sold above cost, which makes it a capital gain.
Year-end summary. Once a year, total the log into six figures:
- Total sales across every platform, to check against any 1099-K you receive
- Total fees, platform and payment combined
- Total shipping you paid
- Gains on personal items, for Form 8949 and Schedule D
- Losses on personal items, kept separate because they aren't deductible
- Business profit from resale or handmade goods, after ordinary and necessary costs
Expense log, if you run it as a business
| Date | What you bought | Category | Amount | Proof |
|---|---|---|---|---|
| Example: 2026-04-01 | Tissue paper | Supplies | $14 | Store receipt |
| Example: 2026-04-01 | Mailers and tape | Packaging | $18 | Card statement |
| Example: 2026-04-06 | Sourcing trip to thrift stores | Mileage | 24 miles | Dated trip note |
| Example: 2026-04-30 | Photo-editing app | Software and subscriptions | $10 | Emailed receipt |
Log mileage and the purpose of each trip at the time. By April, nobody remembers which Saturday drive was for inventory.
Questions Side Sellers Ask
I sold a stroller for less than I paid. Do I owe tax on it? No. With no gain there is nothing to tax, and the loss isn't deductible. If the sale shows up on a 1099-K, report it on Schedule 1 (Form 1040) or Form 8949 so it doesn't count as income.
My 1099-K includes money that wasn't from sales. What now? Ask the platform that issued it for a corrected form, but don't wait for the correction to file your return. Your own records show which payments were sales and which were friends paying you back.
How do I know if my reselling has become a business? Look at how you actually run it: real books, the time you put in, whether you rely on the money, and whether profit or enjoyment is the point. If you are close to the line, an hour with a tax professional is well spent.
Is this tax advice? No. It explains how the rules fit together. For a large gain, a fast-growing resale business, or a form that doesn't match your records, a tax professional can look at your actual situation.
The shelf in the garage will fill up again; a growing child makes sure of that. Next time something leaves it, write down what it cost before you tape the box shut. It takes a minute, and it turns a vague worry into a number you can look at.