Hello, I am looking for advice. I dell items on Mercari. Most are used items of mine, but I also have some on there that I buy and resell. I have sold almost 7K on Mercari this year and am wondering if I am going to get taxed on all of that? If so, I'm going to have hefty taxes to pay. I am married, so should I be filing seperately from my husband this year? Would that make my taxes less?
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You are taxed on your profit, not the total income. Selling online is a business. On your tax return you will report your total income and your expenses. The net business income that is taxable is the total income minus the expenses. Expenses include what you paid for items that you bought for resale.
Income from selling personal items for less than you paid for them is not taxable, but you cannot claim the loss. If Mercari sends you a 1099 showing the full amount that you received, you will have to indicate on your tax return how much of it was for personal items sold at a loss. That amount will not be considered business income.
You will have to pay income tax, plus self-employment tax, on your net business income. Even though that will be less than the full $7,000, you should be making quarterly estimated tax payments so that you don't have a big tax bill, plus penalties and interest, when you file your tax return.
Filing separately from your husband will make your tax more, not less.
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