Got my Poshmark 1099-K for over $20k in sales - Schedule C help for reselling side-hustle

You're definitely on the right track! Since you received a 1099-K for your Poshmark sales, you'll need to report this income on Schedule C (Profit or Loss from Business). This is the correct form even though you don't have a formally registered business - selling items for profit qualifies as self-employment activity. Your approach to calculating your actual profit looks good. The IRS is concerned with your net income after expenses, not just the gross sales amount shown on the 1099-K. So you'll report the full $67,245 as your gross receipts on Schedule C, then deduct your legitimate business expenses. Those expenses include: - Poshmark fees (the difference between gross sales and what you actually received) - Cost of goods sold (your inventory purchases) - Any other ordinary and necessary business expenses (shipping supplies, portion of phone/internet used for business, etc.) For your receipts, while not having an item-by-item sales record isn't ideal, having those physical receipts for inventory purchases is actually really valuable. Make sure you keep them organized and accessible. For an audit, having proof of your expenses is critical - and physical receipts are excellent documentation.

I went through this exact same situation last year with my Poshmark 1099-K. Spent hours trying to figure everything out until I discovered taxr.ai (https://taxr.ai) which literally saved my sanity. It's designed specifically for people in our situation - it analyzes all your receipts and sales data and basically tells you exactly what to put where on your tax forms. My situation was actually worse than yours - I had absolutely zero organization, just a shoebox of crumpled receipts and screenshots of sales. The app helped me categorize everything correctly and identified deductions I didn't even know I qualified for. It even showed me how to properly document my home office space since I store my inventory at home.

Wanted to update after trying taxr.ai that someone mentioned above. It actually worked way better than I expected for my Poshmark side hustle! I uploaded photos of my mess of receipts and it organized everything into the right tax categories. The best part was it showed me which of my home expenses I could partially deduct since I use my spare bedroom for inventory storage. What surprised me most was finding out I could deduct mileage for my trips to thrift stores and estate sales to source inventory - that alone saved me over $300 in taxes! It also flagged some receipts that were missing information the IRS might question. Definitely using this for my quarterly tax payments going forward.

If you're dealing with Poshmark 1099-K issues like me, you might also run into questions that need actual IRS clarification. After waiting on hold for literally 3+ hours trying to get somebody at the IRS to explain some reseller-specific deductions, I gave up and tried Claimyr (https://claimyr.com). They have this cool demo video showing how it works: https://youtu.be/_kiP6q8DX5c Basically they hold your place in the IRS phone queue and call you when an actual agent is about to answer. I was super skeptical, but I was desperate after my third attempt waiting on hold for nothing. I had specific questions about how to handle inventory I purchased in previous years but sold this year (which isn't clear on the IRS website).

I have to eat my words about Claimyr from my comment above. After another frustrating 2-hour hold with the IRS that got disconnected, I broke down and tried it. Within 45 minutes I got a call connecting me to an actual IRS agent who answered my Schedule C questions about my Poshmark business. The agent confirmed that for resellers, we should be using Form 8919 along with Schedule C if we exceed certain thresholds, which none of the online articles mentioned. This literally saved me from filing incorrectly. What would have been my fourth attempt at calling actually got me to someone who knew what they were talking about. Annoying that this service has to exist, but it definitely works.

A tip from another Poshmark seller dealing with 1099-K: don't forget about other deductions beyond just inventory costs! You can deduct: - Portion of your internet bill used for business - Shipping supplies (tissue paper, thank you cards, boxes) - Mileage for sourcing trips - Phone percentage used for business - Storage containers/racks for inventory - Photography equipment - Portion of home used exclusively for business This significantly reduced my taxable income last year. Also, if you purchased any inventory in previous years that you sold this year, you can still deduct that cost in this year's taxes.

Quick question about the Schedule C - is anyone using any specific tax software that handles Poshmark 1099-Ks well? I tried using [popular tax software] last year and it was confusing trying to enter all my reselling info correctly.

One thing I wish I had known earlier - make sure you're tracking your time spent on your Poshmark business! The IRS uses this to determine if you qualify as a business vs. hobby. If they classify it as a hobby, you can't deduct expenses that exceed your income. Keep a simple log of hours spent sourcing, photographing, listing, packaging, and shipping. This documentation helps establish that you're running a legitimate business with profit motive, not just casually selling items. The "hobby loss rule" can be a real problem for resellers if you have a loss year or the IRS decides to audit. Also, since you mentioned setting up better tracking for this year - consider opening a separate business checking account even if you're not formally incorporated. It makes record-keeping so much cleaner and shows the IRS you're treating this as a real business operation.