Rough self-employment tax estimate for resellers selling on eBay, Poshmark, and other platforms. Not tax advice — talk to a CPA for your specific situation.
Log every cost year-round. No April scramble.
This is a rough estimate only. It uses a simplified 22% income tax rate and does not account for the standard deduction, itemised deductions, state taxes, QBI deductions, additional Medicare tax, or other individual factors. Self-employment tax rules vary. Consult a qualified CPA or tax professional for your situation.
Yes — resale income is taxable. If you sell items for profit (not just liquidating personal items at a loss), that income is subject to self-employment tax and income tax. Most platforms now issue 1099-K forms when you exceed $600 in annual payments, making it straightforward for the IRS to track. Keep COGS records to substantiate your deductions.
Self-employment tax is 15.3% — 12.4% for Social Security and 2.9% for Medicare — applied to 92.35% of your net self-employment income. As a self-employed reseller, you pay both the employer and employee portions of these taxes, whereas traditional employees only pay half. That's why it feels so high.
A common rule of thumb is 25–30% of net resale profit. This covers self-employment tax (which hits first and hard) plus estimated income tax. If reselling is your primary income and you have minimal other income, 25% is a reasonable starting point. If you also have a W2 job, the additional resale income may push you into a higher bracket — set aside closer to 30–35%.
Yes — platform fees, shipping costs, packaging materials, mileage to sourcing locations, a portion of your phone and internet, photography equipment, and storage costs are all potentially deductible business expenses. Cost of goods sold is also deductible. Keep detailed records throughout the year; recreating them at tax time is painful and error-prone.
If you expect to owe $1,000 or more in taxes for the year, the IRS requires quarterly estimated tax payments. Deadlines are typically April 15, June 15, September 15, and January 15 of the following year. Failing to pay quarterly can result in an underpayment penalty even if you pay everything by the April filing deadline. Your monthly set-aside figure × 3 gives your approximate quarterly payment.