I am moving at the end of the year and have found good success on Poshmark and Depop. I've made a little over $600 reselling clothes and accessories I haven't worn in over two years. I plan to put these earnings towards furniture I really need. Since I'm selling at a loss (I didn't keep receipts from all the clothes I've bought years ago), I'm wondering what is a good percentage to keep aside for tax purposes?
Are you sure? The American Rescue Plan Act lowered the threshold of $20,000 to $600, plus I already got notified by Poshmark I will receive a 1099-K. I understand there's a self-employment tax of 15.3%. I used to work freelance and had put aside money for when reporting. I was just wondering if this is a similar scenario since I didn't save receipts for everything I am reselling in my closet or handmedowns like clothing and jewelry.
Critter-3 is correct, none of that is taxable, if every item is sold for less than you paid for it. It's the online equivalent of a garage sale. It is not a free lance business subject to self employment tax. You do not need to have receipts.
If you sell any specific item, for more than you paid for it, that is technically reportable. But the gain (profit) is taxed at long term capital gains rates.
The Government rules on expanded 1099-K reporting are new this year. We don't know what the IRS is going to do with them (they will be overwhelmed).
But the bottom line, for now, is: there is no specific place on the tax forms to account for a 1099-K. For a detailed discussion, see this other thread here, in the forum. https://ttlc.intuit.com/community/taxes/discussion/i-sold-some-personal-items-on-ebay-and-received-a-1099-k-i-am-in-mass-where-the-limit-is-600-i-made/00/1831439