Selling items online? Get the latest on a key tax rule change

Selling online and taxes: What you should know—

Payments sent via apps and online platforms, such as Venmo, eBay, or others can trigger a tax form for the person who received the payments. The rules for when the form is sent to payees has changed a couple of times in recent years, making it a bit confusing for those selling items online to get a handle on their tax obligations.

What’s changed and what applies for 2025 tax returns

When the OBBBA became law, the rules for the 2025 calendar year (for returns filed in 2026) require a 1099-K form to be sent when you have over $20,000 in payments and over 200 transactions. This is different from the 2024 tax rules that required that the form be sent if you had over $5,000 in transactions and any amount of transactions.

Online seller tax tips:

 If you’re selling:

• items as part of a hobby or a business, you need to report online sales even if you don’t receive a tax form.
• personal items for less than you paid (at a loss), you don’t need to report it on your taxes.

Check out our FAQs for answers about casual selling, hobby sales and business questions.

File confidently at tax time with help from H&R Block

Not sure how to report your seller income? Don’t sweat it. We’re here to help! Whether you receive Form 1099-K or not, you can count on H&R Block to help you navigate income you received from an online platform.  

Digital Payment and Seller FAQs

How do I handle casual sales income on my tax return?

How you handle your sales depends on what your selling activity looks like. If you have occasional, non-business transactions, such as selling personal items online (think Facebook Marketplace, Ebay, Mercari), it will depend on if you made or lost money.

• If you sell items for less than what you paid, there’s no taxable gain, then you generally don’t need to report it.
• If you sell for more than what you paid, the profit is taxable and may be treated as a capital gain.

If you made a profit from selling personal items:

• Report the gain on your tax return.
• Use Schedule D and Form 8949 if the item qualifies as a capital asset.
• If the sale resembles a business activity (frequent, profit-driven), you may need to report it on Schedule C instead and pay self-employment tax.

I’m not running a business, just clearing out stuff I don’t need. How do I report this?

If you’re not running a business, it makes it a little easier. If you’re selling items for less than what you bought them for, you won’t get to take money off your taxes. But, if you made money on your sale(s), you’ll report it to the IRS on Form 8949 and Schedule D.

I buy and sell mostly related to my hobby. Will I be considered a small business owner now?

No one factor determines if you should be considered a business. If you make a profit is one consideration, but there are actually several others, including your expertise and the time you spend on your activity.  To dig deeper into whether or not the IRS may see you as a business, review our post on hobby taxes.

Final note: You’ll report hobby income on your tax return, but you won’t be able to deduct hobby expenses like you would be able to deduct business expenses.

I no longer file a tax return due to my status (retired, disabled, etc.) and am just selling personal items. Will I have to file one now? 

If you haven’t been required to file taxes, it may be because your income was under a certain amount. If you have capital gains, like the ones described in the questions above, that income may push you over the limit. Review how much you have to make to file taxes.

Are there tax prep services that specialize in seller income?

Yes, H&R Block offers tax preparation services tailored to those who have seller income. We’ve got decades of experience in helping people report personal, hobby and business income. We’ll help you navigate your reportable sales income and factor it into the relevant places on your return.

Whether you work with a tax pro or file on your own, H&R Block makes it easy to report your seller income whether you’ve received Form 1099-K or not. We’ll guide you through the process, so you can file your return with confidence.

Get started with H&R Block.

What is the best service to file taxes if I sold on Facebook Marketplace?

If you’re looking to find the best service to file taxes for items sold on Facebook Marketplace, you’ll want to ensure that your tax provider can help you navigate reporting the income regardless of your selling activity (personal sales, hobby, or even business activity).

Depending on your situation:

• Each activity is reported separately and appears in the relevant sections of your tax return.
• The income may not be taxable, but you still need to report it accurately if you earned a profit or received Form 1099-K.  

With H&R Block’s trusted expertise, you can feel confident knowing your Facebook Marketplace sales—whether personal, hobby, or business—will be reported both easily and accurately. We’ll combine your total transactions, amounts withheld along with other details and factor them into the relevant places onyour tax return.

H&R Block makes it easy to report your income from Facebook Marketplace.  Whether you file with a tax pro or with our DIY options, we’ll guide you through the process, so you can file your return with confidence.

Get started with H&R Block.

I’ve never heard of a 1099-K. What is that form?

Form 1099-K is an IRS tax form that shows money received for goods and services from certain third-party sites, such as payment apps, rideshare services, or other credit or debit card processing sites. If you have enough payments that fall into this category, Venmo, Facebook Marketplace, eBay, Etsy, or whichever service you work with will send you the form mentioned above by January 31 of the following year.   

Do I have to pay tax on the amount that will be reported in 1099-K? 

It depends. If you’ve sold an item and made money on the sale (whether in your business, hobby, or a capital gain on your personal items), then you may owe taxes. However, you may not pay taxes on the total amount shown on your 1099-K.

For example, your form may show a $100 transaction for the comic book you sold, but for your taxes, you’ll factor in what you originally paid plus any fees, which would likely lower your taxes owed. Find out more about capital gains.

Can I get assistance with 1099-K rules for part-time sellers?

H&R Block offers help with 1099-K rules in several ways, taking the stress out of dealing with 1099-K forms. You can get tax help from an expert when you file your taxes and:

• Meet with a tax pro in an office or virtually
• Connect with a tax pro via expert help chat in H&R Block Online.*

H&R Block makes it easy to report your 1099-K income. Whether you file with a tax pro or with our DIY options, we’ll guide you through the process, so you can report your third-party transaction income with confidence.

Get started with H&R Block.

*Expert help chat available with H&R Block Online Plus, H&R Block Online Deluxe, H&R Block Online Premium, and H&R Block Online Self-Employed.

The platform I used asked me to fill out a W-9. Why is that?

The W-9 form is used to get an official record of your Social Security number (or other tax ID number). If the app or online site you use is required to send you a 1099-K, they need to have documentation of your tax ID on Form W-9.

How can I get ready to file my 2025 taxes? What do I need to do now?

You should keep receipts and other documentation related to payments for goods and services. If you’re reselling collectibles, it’s helpful to know what you paid for them. Don’t have your receipt? Don’t worry. There are other ways to estimate this information.

What if I am running a business? How will that change my taxes?

If you’re selling as part of business activities, you’ll have a few new considerations for your taxes. This includes paying estimated taxes and filing Schedule C.  Sound daunting? Don’t fret! Block Advisors, a part of H&R Block, has the expertise to cover all your small business tax needs.

Learn more about Block Advisors small business tax services.