poshmark sales

[gayle9]

I received a 1099K from Poshmark However, I have read that if Poshmark sales are under $5k, taxes do not need to be paid on the sales. True or False?

If true, how do I deduct the 20% PM fee from the gross sales?

How do I deduct the cost of the goods? 

[SabrinaD2]

Form 1099-K tracks income you made from selling goods or providing services via payment apps and online marketplaces. 

• Examples include PayPal, Venmo, Square, Etsy, Uber, and Ebay.
• You should receive a 1099-K if you made more than $5,000 on one of these platforms.
• Even if you don't receive a 1099-K, or you make less than $5,000, you still need to report all taxable income to the IRS.
• Selling personal objects is different from self-employment income or hobby income.
  • Examples of personal items include:
    • Baseball cards
    • Concert or movie tickets
    • Used computers or electronics
    • Cars
    • Used clothes

Follow these steps to enter your 1099-K using TurboTax Premium:

TurboTax Online

1. Open or continue your return.
2. Go to 1099-K.
3. Follow the onscreen instructions to enter your 1099-K.

• Each gain or loss from a personal item sale needs to be reported separately. If you had a loss on the sale of any personal item, it can't cancel out any gain on the sale of another personal item.
• Example: Tyrone bought a couch for $400 and sold it two years later for $200. Since he sold it for less than his original purchase price, the loss can't offset other income, and the sale would be reported as $0 on his tax return. However, when Tyrone bought a table for $200 and sold it for $300 two years later, he had to report the $100 gain as taxable income.
• You can deduct the 20% Poshmark fee from your gross sales as a business expense. To do this, subtract the fee from your total sales to determine your net income. For example, if you sold an item for $100 and Poshmark took a $20 fee, your net income would be $80