Reseller Tax Deductions Checklist for 2026 (eBay, Poshmark, Mercari Sellers)
Short answer: If you resell for profit, the IRS taxes your profit, not your sales. The main reseller deductions are the cost of the items you sold, marketplace fees, shipping labels and supplies, business mileage (72.5¢ per mile for January–June 2026 and 76¢ per mile from July 1, 2026), and other ordinary and necessary business costs like software, a share of your phone, and a qualifying home office.
This checklist is general information with IRS links, not tax advice. Your situation (hobby vs business, state rules, inventory method) can change the answer, so confirm with a tax professional or the IRS publications cited below. The sources were checked on Oct 25, 2026.
What counts as a deductible business expense?
The IRS rule in Publication 334 is that a business expense must be both ordinary (common and accepted in your line of business) and necessary (helpful and appropriate for it). It doesn't have to be indispensable. For a reseller, that covers most of what it takes to buy, list, store and ship inventory.
The checklist
| Expense | Typical reseller examples | Where to learn more |
|---|---|---|
| Cost of goods sold | What you paid for items you sold this year | IRS Pub 334 (cost of goods sold) |
| Marketplace and payment fees | eBay final value fees, Poshmark commission, Mercari selling fee, processing fees, ad fees | Your platform's fee report |
| Shipping | Labels you paid for, including label adjustments | Your platform or carrier receipts |
| Supplies | Mailers, boxes, tape, thermal labels, poly bags | Receipts |
| Business mileage | Sourcing runs, post office drop-offs, supply runs | IRS Pub 463, standard mileage rates |
| Parking and tolls | Business trips only | IRS Pub 463 |
| Equipment | Label printer, shipping scale, photo light box, barcode scanner | IRS Pub 334 |
| Software and subscriptions | Crosslisting apps, bookkeeping spreadsheets, store subscriptions | IRS Pub 334 |
| Phone and internet | The business-use share only | IRS Pub 334 |
| Home office | A space used regularly and exclusively for the business | IRS Pub 334, Pub 587 |
Is cost of goods sold a deduction?
Yes, but timing matters. You generally subtract what you paid for the items you sold during the year, not everything you bought. Unsold inventory at year end usually carries into next year. Publication 334 explains how cost of goods sold is figured on Schedule C. This is why tracking cost per item matters: at tax time you need to know which sold items cost what.
Are eBay and Poshmark fees deductible?
Marketplace fees are a cost of selling, so they reduce your profit. They also explain a common surprise: the IRS says the gross amount on a Form 1099-K isn't adjusted for fees, refunds or shipping. Here's what that gap looks like on one sale:
| Item price | $45.00 |
| Shipping paid by buyer | $6.50 |
| Buyer sales tax (8%, remitted by eBay) | $4.12 |
| Final value fee | −$7.56 |
| Per-order fee | −$0.40 |
| Total eBay fees | −$7.96 |
| Payout from eBay | $43.54 |
| Item cost | −$8.00 |
| Your shipping label | −$6.20 |
| Other costs | −$0.75 |
| Profit | $28.59 |
The buyer paid $51.50 before tax, but eBay kept $7.96, and you spent $14.95 on the item, label and supplies. Your profit on that sale is $28.59, a little over half of the $51.50. Use the eBay fee calculator to see the fee line for any sale, and how to calculate profit on eBay sales for the full formula.
How much is the 2026 mileage deduction?
The IRS standard mileage rate for business use is 72.5 cents per mile for January 1 to June 30, 2026 and 76 cents per mile for July 1 to December 31, 2026, after a mid-year increase. Under Publication 463, business parking fees and tolls can be deducted on top of the standard rate, and if you use the standard rate for a year you can't also deduct actual car expenses like gas and repairs for that year.
Here's a sourcing routine: a 24-mile loop (home, two thrift stores, the post office, home) driven 20 times in the first half and 24 times in the second half of 2026.
| Jan 1 – Jun 30, 2026: 20 trips × 24 mi = 480 mi × 72.5¢ | $348.00 |
| Jul 1 – Dec 31, 2026: 24 trips × 24 mi = 576 mi × 76¢ | $437.76 |
| Standard mileage deduction (1056 mi) | $785.76 |
That's $785.76 of deduction from 1,056 miles. Try your own route in the mileage deduction calculator.
The catch is records. Publication 463 says to record trips at or near the time, with the date, miles and business purpose. A note on your phone after each run is far better than a guess in April.
Can I deduct a home office as a reseller?
Possibly, if a specific area of your home is used regularly and exclusively for the business. Per Publication 334, you don't meet the exclusive-use test if the area is used for both business and personal purposes, but the space doesn't need to be marked off by a permanent partition. The IRS simplified method multiplies $5 by the square feet used, up to 300 square feet, so the simplified deduction is capped at $1,500. Publication 587 has the full rules.
What about the 1099-K?
For 2026, a marketplace or payment app has to send a Form 1099-K only if it paid you more than $20,000 in more than 200 transactions, checked per platform. The One Big Beautiful Bill retroactively reinstated that threshold. You may still get one below it, and the IRS says all income is reportable either way. Check each platform in the 1099-K calculator.
Do resellers pay self-employment tax?
If reselling is a business, generally yes once net earnings from self-employment reach $400. Publication 334 lists the self-employment tax rate as 15.3% (12.4% Social Security plus 2.9% Medicare) on net earnings, which is another reason deductions matter: they reduce the profit that tax applies to.
Hobby or business?
Cleaning out your closet is different from buying to resell. The IRS says income from goods you sell must be reported, including personal items such as clothing or furniture sold at a gain. If you only sell your own used things, most of this business checklist may not apply. If you source items to sell for profit, it does.
Keep records all year
Deductions only help if you can back them up. Keep receipts for inventory and supplies, export platform fee reports, and log miles as you drive. The Fliprofit Profit Tracker keeps cost, sale price, fees and profit per item in one spreadsheet so year-end totals are already done.
Sources
- IRS Publication 334, Tax Guide for Small Business, checked Oct 25, 2026.
- IRS Publication 463, Travel, Gift, and Car Expenses, checked Oct 25, 2026.
- IRS Standard mileage rates, checked Oct 25, 2026.
- IRS Notice 2026-10, checked Oct 25, 2026.
- IRS: Understanding your Form 1099-K, checked Oct 25, 2026.
- IRS: Form 1099-K FAQs, general information, checked Oct 25, 2026.
- IRS Publication 587, Business Use of Your Home, checked Oct 25, 2026.
FAQ
What can resellers deduct on taxes?
Common reseller deductions include the cost of items sold, marketplace and payment fees, shipping labels, packing supplies, business mileage, parking and tolls, equipment like label printers and scales, software subscriptions, the business share of a phone, and a qualifying home office. Each must be ordinary and necessary for the business.
What is the IRS mileage rate for resellers in 2026?
The business standard mileage rate is 72.5 cents per mile for miles driven January 1 to June 30, 2026, and 76 cents per mile for July 1 to December 31, 2026. Business parking and tolls can be added on top.
Do I need a 1099-K to report reselling income?
No. The IRS says you must report all income whether or not you get a Form 1099-K. For 2026, platforms only have to send one when they paid you more than $20,000 in more than 200 transactions.
Can I deduct inventory I haven't sold yet?
Generally you deduct the cost of the items you sold during the year as cost of goods sold. Inventory still on hand at year end usually counts toward a later year. IRS Publication 334 explains the rules, and a tax professional can help with your method.