--- title: "Federal tax answers for resellers, from IRS sources" description: "16 federal tax questions resellers ask, each answered from IRS publications and instructions: records, hobby rules, 1099-K, inventory, mileage and more." canonical: https://resellerindex.com/tax/irs/ last_updated: 2026-10-23 publisher: "The Reseller Index" --- # Federal tax answers for resellers Each page answers one question resellers ask about federal income tax, from the IRS's own publications, form instructions, notices and FAQs and the Treasury regulations behind them: the answer first, the rule quoted with its section, then worked examples, edge cases and what to do. General information, not tax advice. No page says what you should file; check with a tax professional about your own situation. Checked against the IRS sources on Oct 19, 2026. ## 2026 figures at a glance The numbers these pages use, each from the IRS document named. Every one has conditions the linked page explains. *From the IRS sources linked in each row, read Oct 19, 2026. General information, not tax advice.* | Item | Figure | Source | | --- | --- | --- | | [Business standard mileage rate, Jan. 1-June 30, 2026](https://resellerindex.com/tax/irs/standard-mileage-rate-2026/) | 72.5 cents a mile | [Notice 2026-10, 2026 standard mileage rates](https://www.irs.gov/pub/irs-drop/n-26-10.pdf) | | [Business standard mileage rate, from July 1, 2026](https://resellerindex.com/tax/irs/standard-mileage-rate-2026/) | 76 cents a mile | [Announcement 2026-11, Internal Revenue Bulletin 2026-29 (July 13, 2026)](https://www.irs.gov/irb/2026-29_irb) | | [Depreciation part of the 2026 business mileage rate](https://resellerindex.com/tax/irs/standard-mileage-rate-2026/) | 35 cents a mile (reduces the car's basis) | [Notice 2026-10, 2026 standard mileage rates](https://www.irs.gov/pub/irs-drop/n-26-10.pdf) | | [Self-employment tax rate](https://resellerindex.com/tax/irs/self-employment-tax-400-rule/) | 15.3% (12.4% Social Security + 2.9% Medicare) | [Self-employment tax (Social Security and Medicare taxes)](https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes) | | [Social Security wage base, 2026](https://resellerindex.com/tax/irs/self-employment-tax-400-rule/) | $184,500 | [Form 1040-ES (2026), Estimated Tax for Individuals](https://www.irs.gov/pub/irs-pdf/f1040es.pdf) | | [Schedule SE floor](https://resellerindex.com/tax/irs/self-employment-tax-400-rule/) | $400 of net earnings (92.35% of net profit) | [Schedule SE (Form 1040) 2025, Self-Employment Tax](https://www.irs.gov/pub/irs-pdf/f1040sse.pdf) | | [Estimated tax: expected tax owed after withholding](https://resellerindex.com/tax/irs/estimated-tax-for-resellers/) | $1,000 or more | [Form 1040-ES (2026), Estimated Tax for Individuals](https://www.irs.gov/pub/irs-pdf/f1040es.pdf) | | [Form 1099-NEC threshold, payments in 2026](https://resellerindex.com/tax/irs/1099-nec-2000-threshold-helpers/) | $2,000 (was $600) | [Publication 1099 (2026), General Instructions for Certain Information Returns](https://www.irs.gov/publications/p1099) | | [Form 1099-NEC or MISC for buying merchandise](https://resellerindex.com/tax/irs/1099-nec-2000-threshold-helpers/) | Not required (a listed exception) | [Instructions for Forms 1099-MISC and 1099-NEC (12/2026)](https://www.irs.gov/instructions/i1099mec) | | [Form 1099-K test, payment apps and marketplaces](https://resellerindex.com/tax/irs/personal-items-sold-at-a-loss-1099-k/) | Over $20,000 in more than 200 transactions | [Understanding your Form 1099-K](https://www.irs.gov/businesses/understanding-your-form-1099-k) | | [Form 1099-K threshold, payment card sales](https://resellerindex.com/tax/irs/wrong-1099-k-what-to-do/) | None: any amount is reported | [Form 1099-K FAQs: General information](https://www.irs.gov/newsroom/form-1099-k-faqs-general-information) | | [Small business taxpayer gross receipts test, 2026](https://resellerindex.com/tax/irs/do-small-resellers-have-to-keep-inventory/) | $32 million (3-year average) | [Rev. Proc. 2025-32 (2026 inflation-adjusted items)](https://www.irs.gov/pub/irs-drop/rp-25-32.pdf) | | [De minimis safe harbor, no applicable financial statement](https://resellerindex.com/tax/irs/de-minimis-safe-harbor-2500/) | $2,500 per invoice or item | [Tangible property final regulations (FAQ)](https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations) | | [Simplified home office deduction](https://resellerindex.com/tax/irs/home-office-deduction-inventory-storage/) | $5 per sq ft, up to 300 sq ft ($1,500) | [Instructions for Schedule C (Form 1040) (2025)](https://www.irs.gov/instructions/i1040sc) | | [General period to keep records](https://resellerindex.com/tax/irs/how-long-to-keep-tax-records/) | 3 years after filing | [Publication 583 (12/2024), Starting a Business and Keeping Records](https://www.irs.gov/publications/p583) | ## Business, hobby or personal sale - [Is reselling a hobby or a business for the IRS?](https://resellerindex.com/tax/irs/is-reselling-a-hobby-or-a-business/) It turns on whether you do it to make a profit, judged on all the facts: the IRS weighs factors such as whether you run it in a businesslike way with complete books, the time and effort you put in, and your history of profits and losses, and no single factor decides. - [When does selling things online go on Schedule C, and when doesn't it?](https://resellerindex.com/tax/irs/does-reselling-go-on-schedule-c/) The Schedule C instructions say it reports income or loss from a business you operated as a sole proprietor, and that an activity is a business if your primary purpose is income or profit and you are involved in it with continuity and regularity. ## 1099s and income - [Do you owe tax on a 1099-K for personal items sold at a loss?](https://resellerindex.com/tax/irs/personal-items-sold-at-a-loss-1099-k/) No: the IRS says that if you sold a personal item for less than you paid for it, there is no tax liability, and the loss can't be deducted either. - [What should a seller do with a wrong Form 1099-K?](https://resellerindex.com/tax/irs/wrong-1099-k-what-to-do/) Contact the filer named in the upper left corner of the form and ask for a corrected Form 1099-K; the IRS says it can't correct the form for you. - [Do you need a 1099-NEC for someone who helps with your reselling?](https://resellerindex.com/tax/irs/1099-nec-2000-threshold-helpers/) For tax years beginning after 2025, the 1099-NEC threshold is $2,000: a business generally reports payments of $2,000 or more in a year to a nonemployee for services, such as a contractor who lists, packs or photographs items, up from $600 before. ## Inventory and cost of goods sold - [How does cost of goods sold work for items you resell?](https://resellerindex.com/tax/irs/cost-of-goods-sold-for-resellers/) Cost of goods sold is the cost of the inventory you actually sold in the year: opening inventory, plus purchases less items you took for personal use, plus costs such as freight-in on merchandise you bought, minus your inventory at the end of the year. - [Do small resellers have to keep an inventory for taxes?](https://resellerindex.com/tax/irs/do-small-resellers-have-to-keep-inventory/) Not necessarily: a small business taxpayer, meaning average annual gross receipts of $31 million or less for the 3 prior tax years in the 2025 instructions and not a tax shelter, can choose not to keep an inventory but must still use a method that clearly reflects income. - [Can a reseller deduct inventory they donate, toss or can't sell?](https://resellerindex.com/tax/irs/donating-unsold-inventory/) For inventory you donate, Publication 334 says the charitable deduction is the smaller of the item's fair market value or its basis, and if the item's cost isn't in your opening inventory, as when you buy and donate it in the same year, its basis is zero and there's no charitable deduction. ## Deductions - [Are marketplace selling fees deductible for resellers?](https://resellerindex.com/tax/irs/are-selling-fees-deductible/) 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. - [What is the 2026 standard mileage rate for sourcing and shipping trips?](https://resellerindex.com/tax/irs/standard-mileage-rate-2026/) For 2026, the IRS business standard mileage rate is 72.5 cents a mile for miles driven January 1 through June 30 and 76 cents a mile for miles driven on or after July 1, 2026, after Announcement 2026-11 raised it because of higher fuel prices. - [Can resellers use the simplified home office deduction for inventory storage?](https://resellerindex.com/tax/irs/home-office-deduction-inventory-storage/) Yes, if the tests are met: the simplified method is $5 times the square footage used regularly and exclusively for business or regularly to store inventory or product samples, capped at 300 square feet, so the most it can be is $1,500. - [Can resellers deduct equipment under $2,500 in the year they buy it?](https://resellerindex.com/tax/irs/de-minimis-safe-harbor-2500/) Yes, if you elect the de minimis safe harbor: a business without an applicable financial statement can deduct amounts paid for tangible property up to $2,500 per invoice or per item, as long as it treats them as expenses in its books under a procedure in place at the start of the year. ## Self-employment and estimated tax - [When does a reseller owe self-employment tax, and how much is it?](https://resellerindex.com/tax/irs/self-employment-tax-400-rule/) Self-employment tax applies when your net earnings from self-employment are $400 or more, and Schedule SE counts those earnings as 92.35% of net profit, so a Schedule C profit under about $433 stays below the line. - [Do resellers have to pay quarterly estimated tax, and when is it due?](https://resellerindex.com/tax/irs/estimated-tax-for-resellers/) Generally yes, if you expect to owe at least $1,000 for 2026 after withholding and refundable credits, and those will be less than the smaller of 90% of your 2026 tax or 100% of your 2025 tax (110% if your 2025 AGI was over $150,000). ## Records - [What records should a reseller keep for the IRS?](https://resellerindex.com/tax/irs/what-records-should-a-reseller-keep/) The IRS doesn't require a particular kind of records: you can use any system that clearly shows your income and expenses, as long as supporting documents such as receipts, invoices and statements back up each entry. - [How long should a reseller keep receipts and sales records?](https://resellerindex.com/tax/irs/how-long-to-keep-tax-records/) Generally, keep the records that support a return until its period of limitations runs out, which is 3 years after you file in most cases; a return filed early is treated as filed on its due date. ## More tax pages - [Form 1099-K for resellers: the $20,000, 200-transaction test](https://resellerindex.com/guides/1099-k-for-resellers/) - [Where each selling app keeps its sales report](https://resellerindex.com/guides/sales-reports-for-taxes/) - [State rules: marketplace sales tax and state 1099-K thresholds](https://resellerindex.com/tax/states/) - [IRS changes in the tracker](https://resellerindex.com/changes/irs/) - [All tax pages](https://resellerindex.com/tax/) ## General information, not tax advice These pages summarize and quote IRS publications, instructions and guidance as read on Oct 19, 2026. They cover federal rules only and don't say what you should file or deduct. Check with a tax professional about your own situation. ## Sources for the figures above Each answer page lists every source it uses. - [Notice 2026-10, 2026 standard mileage rates](https://www.irs.gov/pub/irs-drop/n-26-10.pdf) - [Announcement 2026-11, Internal Revenue Bulletin 2026-29 (July 13, 2026)](https://www.irs.gov/irb/2026-29_irb) - [Self-employment tax (Social Security and Medicare taxes)](https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes) - [Form 1040-ES (2026), Estimated Tax for Individuals](https://www.irs.gov/pub/irs-pdf/f1040es.pdf) - [Schedule SE (Form 1040) 2025, Self-Employment Tax](https://www.irs.gov/pub/irs-pdf/f1040sse.pdf) - [Publication 1099 (2026), General Instructions for Certain Information Returns](https://www.irs.gov/publications/p1099) - [Instructions for Forms 1099-MISC and 1099-NEC (12/2026)](https://www.irs.gov/instructions/i1099mec) - [Understanding your Form 1099-K](https://www.irs.gov/businesses/understanding-your-form-1099-k) - [Form 1099-K FAQs: General information](https://www.irs.gov/newsroom/form-1099-k-faqs-general-information) - [Rev. Proc. 2025-32 (2026 inflation-adjusted items)](https://www.irs.gov/pub/irs-drop/rp-25-32.pdf) - [Tangible property final regulations (FAQ)](https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations) - [Instructions for Schedule C (Form 1040) (2025)](https://www.irs.gov/instructions/i1040sc) - [Publication 583 (12/2024), Starting a Business and Keeping Records](https://www.irs.gov/publications/p583) Subscribe: https://resellerindex.com/subscribe/ Want these numbers next to your own sales? The Profit Toolkit, $29 once (our own product) One Excel workbook you own: the fee calculators for 7 platforms (not TikTok Shop), USPS Media Mail and Ground Advantage tables, a minimum-price builder, a profit log and a monthly P&L. Instant download; refund within 30 days if it doesn't help. [Buy the Toolkit: $29](https://buy.stripe.com/fZudR97YV8ZB3YL05ogjC03) [See what's inside](https://resellerindex.com/toolkit/) --- The Reseller Index Researched and drafted with AI assistance from each platform's and carrier's own published pages. A full-time reseller runs The Reseller Index and will edit every newsletter issue once the newsletter starts. Every number links to its source and carries the date we checked it. Spot an error? [Tell us](https://resellerindex.com/corrections/) and we'll fix it in the public corrections log. General information, not tax, legal or financial advice. Not affiliated with or endorsed by eBay, Amazon, Mercari, Poshmark, Depop, Whatnot, Etsy, TikTok Shop, USPS, the IRS or the software companies whose prices we track; their names belong to them. Each page shows the date its own rates were last checked. Sponsored placements are always labeled "Sponsored". © 2026 The Reseller Index. No trackers, no ad cookies.