According to Poshmark's web site, the 20% is a sales commission you are paying to Poshmark for what they do. It is not for taxes. If someone is just occasionally selling items of their own clothing for less than what they paid for it, it would not be a business and it would not be reported on their tax return.
Hello, I am curious to know, I know that Poshmark takes out 20% if you sell an item over $15. But I have sold a few item's from my closet, and after the item is sold, they show you what your net is from the sale. But below that it reads say you sell an item for $20.. they take their 20%, but also reads below the transaction that $1.20 or $2.40 has been taken for tax purposes. And even if 2 item's sell for the exact same price. The amount that is taken for tax purposes can be $1.20 or $1.40. I don't understand this, and how can they do this. How do they know what certain states charge? Im befuttled I guess. So they are taking more than 20% for their work. I believe if you have and sell high quality item's than you can definitely make money. But I am going to look into why they are taking taxes out of each item that I sell from my closet. Like I said. I sell something for $20 they take their 20% and down below it reads for tax purposes -$1.20 or $2.40... id like to understand exactly what does that mean? And it can be the same price $20 and the price is $1.20 taken and $20 for another item and below it reads $1.40 or $1.60!! Very strange. I'm very interested in finding out what this all means on Poshmark part. It almost seems like they are taking alot more money than what they claim.
That is a sales tax that is charged to the buyer. It differs as sales tax differs from state to state. The tax the buyer is paying has nothing to do with income tax that you have to pay at the end of the year.
To add to what @LucyinFlorida wisely stayed, the sales tax is collected and remitted by Poshmark, and is not revenue for the platform. They are doing sellers a favor by removing seller burden to collect and submit sales tax for sales made within a seller’s state, which would require a seller to apply for tax ID numbers and remit taxes quarterly.
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