eBay seller tax guide for 2026. 1099-K threshold, deductible expenses, self-employment tax, quarterly payments, and how to stay compliant.
eBay selling is taxable income. The IRS requires reporting of profits from eBay sales regardless of the 1099-K threshold. Here is what you need to know for the 2026 tax year.
eBay issues a 1099-K for sellers with gross sales over $600 in a calendar year (as of current IRS guidance). This 1099-K goes to both you and the IRS. Important: the 1099-K reports gross sales, not profit. Your taxable profit is gross sales minus cost of goods sold, eBay fees, shipping costs, and other legitimate business expenses.
Keep records of: cost of goods purchased for resale, eBay selling fees and store subscriptions, PayPal/payment processing fees, shipping costs paid (postage, boxes, tape, bubble wrap), mileage driving to sourcing locations, home office portion if you have a dedicated reselling space, and RGLister subscription fees. All are legitimate business deductions.
If you sell on eBay as a business (which the IRS defines as regular activity with profit intent), you owe self-employment tax (15.3%) on net profit in addition to income tax. This catches many eBay sellers off guard. Estimate this when calculating your real profitability from reselling.
If you expect to owe more than $1,000 in federal taxes from eBay income, make quarterly estimated tax payments (due April 15, June 15, September 15, January 15). Underpayment penalties apply when annual tax liability exceeds $1,000 without quarterly payments. Use IRS Form 1040-ES to calculate and submit.
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