---
title: "Are selling fees deductible? What Schedule C says"
description: "For someone who regularly sells, Schedule C's line 10 covers fees paid to make a sale. A 1099-K gross isn't reduced for fees, so they come from your records."
canonical: https://resellerindex.com/tax/irs/are-selling-fees-deductible/
last_updated: 2026-10-23
publisher: "The Reseller Index"
---

# Are marketplace selling fees deductible for resellers?

**Yes for a reseller selling as a business: the Schedule C instructions say a dealer in property, a person who regularly sells property in the ordinary course of their business, enters on line 10 the commissions and fees paid to facilitate those sales, while other sellers must generally capitalize such fees.** The fees have to come from your own records, because the IRS says the gross amount on a Form 1099-K isn't adjusted for fees, refunds or shipping.

General information from IRS sources, not tax advice. It doesn't say what you should file; check with a tax professional about your own situation.

Checked against the IRS pages listed below on Oct 19, 2026.

## What the IRS says

> "…if you are a dealer in property, enter on line 10 the commissions and fees you paid to facilitate the sale of that property."

[Instructions for Schedule C (Form 1040) (2025)](https://www.irs.gov/instructions/i1040sc), Line 10: Sales of property; page reviewed or updated Apr 30, 2026.

> "A dealer in property is a person who regularly sells property in the ordinary course of their trade or business."

[Instructions for Schedule C (Form 1040) (2025)](https://www.irs.gov/instructions/i1040sc), Line 10: Note; page reviewed or updated Apr 30, 2026.

> "To be deductible, a business expense must be both ordinary and necessary."

[Publication 334 (2025), Tax Guide for Small Business](https://www.irs.gov/publications/p334), Chapter 8, Business Expenses; page reviewed or updated Apr 30, 2026.

> "The gross payment amount shows the total value of payments you received through payment card and third party network transactions."

[What to do with Form 1099-K](https://www.irs.gov/businesses/what-to-do-with-form-1099-k), Gross payment amount (Box 1a); page reviewed or updated Jul 27, 2026.

> "These taxes are not included in gross receipts or sales nor are they a deductible expense."

[Instructions for Schedule C (Form 1040) (2025)](https://www.irs.gov/instructions/i1040sc), Line 23: sales taxes imposed on the buyer that you collect and pay over; page reviewed or updated Apr 30, 2026.

## What the Schedule C instructions say for each cost

*Line descriptions from the Instructions for Schedule C (Form 1040) (2025). Which line a given cost belongs on for your return is a question for a tax professional.*

| Cost | What the instructions say | Line |
| --- | --- | --- |
| Fees a platform charges to complete a sale | A dealer in property enters the commissions and fees paid to facilitate the sale of that property; don't include fees capitalized or deducted elsewhere | 10 |
| A helper you don't treat as an employee | Contract labor: payments for services to people you don't treat as employees | 11 |
| Postage | Office supplies and postage | 18 |
| Boxes, mailers, tape | Materials and supplies, generally to the extent consumed and used in the year; incidental supplies with no records of use can be deducted when bought, if that clearly reflects income | 22 |
| Equipment under the de minimis safe harbor | Only as other expenses, not on any other line | Part V |
| Other ordinary and necessary costs | Expenses not deducted elsewhere, listed by type and amount | Part V |

## Why fees don't show on the 1099-K

The Form 1099-K instructions define box 1a's gross amount as the total of reportable payment transactions without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, shipping amounts or any other amounts. The IRS's 1099-K page says to check your records for these and deduct them from the gross.

The IRS's Form 1099-K questions add that fees, credits, refunds, shipping, cash equivalents and discounts are not income, and that taxpayers can deduct them from the gross amount when including the income on the return. To see the fee on any single sale, the site's [fee calculators](https://resellerindex.com/calculators/) work it out platform by platform.

## Sales tax inside the 1099-K gross

Publication 334 says a Form 1099-K may include items that aren't in your receipts, such as sales tax, so the box 1a figure isn't automatically your gross receipts.

The Schedule C instructions treat sales tax two ways. State and local sales taxes imposed on the buyer that you were required to collect and pay over aren't included in gross receipts and aren't a deductible expense; if the state or local government let you keep part of what you collected, that part goes in income on line 6. A tax imposed on you as the seller is deducted on line 23, and if you collected it from the buyer, the amount collected is also included in gross receipts on line 1.

## Worked examples

### A year on one platform

Gross sales were $18,000, including $2,100 of shipping buyers paid. The platform charged $2,430 in fees, refunded $350 to buyers and sold you $2,050 of shipping labels, paid out of your balance. The payouts come to $13,170 ($18,000 minus $2,430, $350 and $2,050), but the 1099-K shows the $18,000 gross. The fees, the refunds and the label costs each come from your records.

### A fee on a personal item

Selling your own used coat isn't selling property in the ordinary course of a business. For someone who isn't a dealer, the instructions say commissions and fees paid to facilitate a sale must generally be capitalized rather than entered on line 10. Personal items are covered on [personal items sold at a loss](https://resellerindex.com/tax/irs/personal-items-sold-at-a-loss-1099-k/).

### Sales tax in the gross

A platform's annual report shows $18,000 of item sales and buyer-paid shipping, plus $1,260 of sales tax collected from buyers, and the 1099-K shows $19,260. If the $1,260 is a sales tax imposed on the buyers, Publication 334's point applies: the form can include sales tax that isn't part of your receipts, so the receipts figure the rules describe is your records' $18,000, not box 1a's $19,260. If it is a tax imposed on you as the seller, the Schedule C instructions treat it the other way described above. Keep the report that shows the $1,260 with the 1099-K, and confirm with a tax professional which kind of tax it is and how your platform's figures are built.

## Edge cases

- Refunds to buyers are a separate item: the Schedule C instructions describe line 2 as sales returns and allowances, cash or credit refunds to customers and reductions in selling price.
- If an expense is partly business and partly personal, such as a phone plan, Publication 334 says to separate the personal part, which is generally not deductible.
- Publication 334 says an ordinary expense is one that is common and accepted in your field of business, and a necessary one is helpful and appropriate for it; an expense doesn't have to be indispensable to be necessary.

## What to do

1. Download each platform's annual transaction or fee report: [where each app keeps its reports](https://resellerindex.com/guides/sales-reports-for-taxes/).
2. Reconcile the report's gross to the 1099-K before totaling fees.
3. Note the sales tax the platform's report shows as collected, apart from item sales and shipping.
4. Keep fees, refunds and shipping labels as separate totals.
5. Check with a tax professional about where each cost goes on your return.

## Questions

### Is the 1099-K amount net of fees?

No. Box 1a is figured without any adjustment for fees, refunds, shipping and similar amounts, so the fees come from your own records.

### Is the sales tax in my 1099-K income?

Sales tax imposed on buyers that a seller collects and pays over isn't included in gross receipts and isn't a deductible expense, the Schedule C instructions say, and Publication 334 notes a 1099-K may include sales tax that isn't part of your receipts. A tax imposed on you as the seller is different: it's deducted on line 23, and any amount of it collected from buyers is included on line 1.

### Are shipping labels deductible?

Postage is one of the expenses the Schedule C instructions name, under line 18 with office supplies. A cost has to be ordinary and necessary for the business to be deductible.

### Where can I see the fees on my own sales?

In each platform's own sales or fee report. The site's [fee calculators](https://resellerindex.com/calculators/) show the fee on any single sale.

## Related questions

- [What should a seller do with a wrong Form 1099-K?](https://resellerindex.com/tax/irs/wrong-1099-k-what-to-do/)
- [How does cost of goods sold work for items you resell?](https://resellerindex.com/tax/irs/cost-of-goods-sold-for-resellers/)
- [Can resellers deduct equipment under $2,500 in the year they buy it?](https://resellerindex.com/tax/irs/de-minimis-safe-harbor-2500/)
- [When does a reseller owe self-employment tax, and how much is it?](https://resellerindex.com/tax/irs/self-employment-tax-400-rule/)
- [Form 1099-K for resellers: the $20,000, 200-transaction test](https://resellerindex.com/guides/1099-k-for-resellers/)
- [State rules: marketplace sales tax and state 1099-K thresholds](https://resellerindex.com/tax/states/)
- [All federal tax answers for resellers](https://resellerindex.com/tax/irs/)

## General information, not tax advice

This page summarizes IRS publications, instructions and guidance as read on Oct 19, 2026. It doesn't say what you should file or deduct. Tax rules depend on your facts, and state rules aren't covered here (see [state rules](https://resellerindex.com/tax/states/)). Check with a tax professional.

## Sources

Every figure, rule and quote on this page comes from one of these official pages.

- [Instructions for Schedule C (Form 1040) (2025)](https://www.irs.gov/instructions/i1040sc) (IRS, page reviewed or updated Apr 30, 2026; read Oct 19, 2026)
- [Publication 334 (2025), Tax Guide for Small Business](https://www.irs.gov/publications/p334) (IRS, page reviewed or updated Apr 30, 2026; read Oct 19, 2026)
- [What to do with Form 1099-K](https://www.irs.gov/businesses/what-to-do-with-form-1099-k) (IRS, page reviewed or updated Jul 27, 2026; read Oct 19, 2026)
- [Instructions for Form 1099-K (12/2026)](https://www.irs.gov/instructions/i1099k) (IRS, page reviewed or updated Jun 1, 2026; read Oct 19, 2026)
- [Form 1099-K FAQs: General information](https://www.irs.gov/newsroom/form-1099-k-faqs-general-information) (IRS, page reviewed or updated Apr 3, 2026; read Oct 19, 2026)

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---

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