Poshmark sales and expenses

leopa · ‎February 18, 2025

For Poshmark, I have all the data but it's really hard to figure out where to put it. It should be straightforward. I'm a seller of things i have and things i have resold. Where do I put these items?

1) 1099 K box 1a $25,266

2) Amount of cancellations/refunds $2,562 (total gross should be $22,684)

3) Net income after posh fees $18,124

4) Cost basis (cost into sold items) for 2024 items $16,024 (therefore I had a profit of $2,100)

5) All expenses - supplies, miles, boxes, shipping, home office, internet, phone, bank fees) totalling $5,215.

This is a loss of $3,125.

Thank you if someone could figure this out. This should be common to Poshmark sellers.

KrisD15

If you are in the business of selling on Postmark, enter everything on Schedule C as a self-employed taxpayer.

If this is selling items, like having a garage sale enter as follows:

Remember that if you are entering as "sale of personal items", gains and losses are treated differently than if you are a business. Losses DO NOT offset gain.

Losses are not reported (they are subtracted form the proceeds reported on the 1099-K along with anything you broke even on).

If ANY item sold at a gain, the gain on that item must be reported and claimed.

It would be as if you sold your car at a loss, that is not reported. If, however if your car turns into a classic and you sell at a gain, TAXABLE INCOME.

You enter the 1099-K and subtract the proceeds ( the amount on the 1099-K ) that represents sales that resulted in a loss or broke even.

This means whatever is left was what you received for selling thing that resulted in a gain.

Next, you enter the items that sold at a gain in the investment section, subtract your cost and compute the profit. The profit is what you must claim as income (capital gain)

STEPS:

If you sell items online as a business, enter on Schedule C

If you sell personal items online similar to a garage sale enter following these steps:

In TurboTax enter the 1099-K under:

Income
Other Common Income
Income from Form 1099-K START
On the “Did you get a 1099-K?” screen, select “Yes”
On the “Which type of income is your 1099-K for?” screen, select “Personal item sales” CONTINUE
Enter the 1099-K as it was reported and select the box for “This amount in box 1a is too high or includes some personal transactions” in order to enter any personal items such as birthday gifts if applicable

CONTINUE

On the next “Personal Item Sales” screen, make the correct selection.
Choose “I sold some items at a loss or had no gain” if you made a profit on any individual sale
Chose “All items were sold at a loss or had no gain” If ALL the items were sold and you did not realize a gain on any single item, (they sold for less than or only for as much as you paid to purchase the item in the first place) you would not need to enter any sales. Enter the amount of the 1099-K that represents the cash you got for selling items at cost or under.
So, if the 1099-K reports $1,000 and the only item you sold at a profit was an item that sold for $50, you would enter 950.
$950.00 on that 1099-K does not need to be address.
Also, remember that this is NOT saying you MADE $50, only that someone paid $50. The profit would be less because you need to subtract what you paid to buy it.

CONTINUE

Finish the interview and select done on the “Your 1099-K summary” screen,

YOU ARE NOT DONE if you made the first choice that only SOME items sold at a loss,

that would mean that at least one item sold at a gain, for a profit.

Now you need to report the sale, go to

Income
Investment Income
Stocks, Cryptocurrency, Mutual Funds, Bonds, Other click UPDATE
The next screen should show “Personal items sales (1099-K)”
Click REVIEW to open
The next screen has an input screen for the Personal items you sold at a
profit/gain.
Enter one sale at a time.
Report when purchased, when sold, how much you paid to buy it and how much they paid to buy it from you

The next screen asks for selling fees, but those are USUALLY deducted before they pay you, so would not be included on Form 1099-K

If they were not, enter here

Once done, you should see the amount of proceeds you needed to address ($50) and the profit you made from that (those) sales.

The profit is Capital Gain listed on your 1040 line 7

Enter the 1099-K and finish the interview

After finshed with entering the 1099-K, enter the items that sold at a profit under Investment Income

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leopa

Thanks for such a quick response! Very nice. Based on your response, to use the expenses I have, it sounds like I need to put all in the schedule K. I have a loss of $3,125.

Your direction of ignoring the losses and just putting the gains in makes no sense to me. Why would I want to pay taxes on those gains without any offsets of my expenses or losses in sales?

leopa

I meant in Schedule C.

FYI this is a losing business and I don't think I should be paying taxes on losses.

LeticiaF1

If your business has a loss, you won't have to pay taxes on it, you only pay taxes when your have gains. Even if it had a loss, you still have to report it.