If you sell on eBay, Etsy, Facebook Marketplace or get paid through Venmo or PayPal, you have probably heard scary things about a "$600 tax rule." Here is the calm version: Congress moved the reporting line back to $20,000 and 200 transactions in the 2025 tax law. Below that, payment apps generally do not send you (or the IRS) a Form 1099-K.
The form is not the tax
This is the part almost everyone gets wrong. The 1099-K is just a report — it tells the IRS money moved. Whether you owe tax has never depended on the form: profit from selling things is taxable at any amount. Sold your old couch for less than you paid? That is not income. Sold fifty handmade candles at a profit? That is, even with no form.
Personal stuff vs a side business
Selling personal items at a loss (your used phone, old furniture) creates no tax. Regularly selling for profit makes you, in the IRS's eyes, a small business — which sounds bad but comes with a gift: you can deduct costs. Materials, shipping, platform fees and a share of supplies all come off the profit before tax.
What this means for you
- Under $20,000 in sales, no 1099-K arrives — keep your own records anyway; profit is taxable with or without the form.
- Track what you paid for things you resell. Profit = sale price minus your cost and fees.
- Side income is usually untaxed until you file — our self-employment tax calculator shows what to set aside so April is boring.
Where these facts come from: IRS — Understanding your Form 1099-K. This article is general information, not tax advice — a tax professional can look at your specific situation.