Mostly, cleaning out your closet doesn’t create a tax bill. Selling for more than you paid, or buying things to resell, is a different story. Here’s the difference, in plain English.
Selling your own clothes for less than you paid
If you sell personal items for less than you paid for them, the IRS says there’s no tax to pay. You can’t deduct the loss, either (IRS: What to do with Form 1099-K, checked ). For most people selling last season’s jeans, that’s the whole story.
Selling for more than you paid
If a personal item sells for more than it cost you, the profit is taxable. The IRS uses clothing and furniture as examples of personal items you must report when they sell at a gain (IRS: Understanding your Form 1099-K, checked ). Vintage pieces and hyped sneakers are where this usually comes up.
Buying to resell
Thrift flipping, buying lots to resell, or selling as a side hustle is different from clearing out your own closet. The IRS treats that income as business or hobby income and says where to report it (IRS, checked ). Whether it’s a hobby or a business depends on things like whether you run it like a business and expect a profit (IRS: Hobby or business, checked ).
The 1099-K: what the numbers mean
Marketplaces have to send you a Form 1099-K when the payments you receive for goods total over $20,000 in more than 200 transactions in a year. They may send one for less (IRS.gov: Understanding your Form 1099-K, checked ).
The form is a report of payments, not a tax bill. It doesn’t know what you paid for things. And whether or not you get one, the IRS says you must report income you earn from selling (IRS.gov, checked ).
Keep these records
- What you paid for each item, with receipts or order history where you have them.
- What it sold for, the platform’s fees and your shipping costs.
- For personal items, anything that shows the original price (an old order email is fine).
If you’d like a ready-made place for all of that, the Reseller Tax Records Kit from our shop is a spreadsheet for logging sales, costs and 1099-K totals across platforms. It’s for record-keeping only, not tax advice.
Want to see the fees each sale paid? Our payout comparison and the platform calculators break them out line by line.
Quick answers
Do I pay tax on clothes I sell online?
Not if you sell your own clothes for less than you paid; the IRS says there’s no tax on a personal item sold at a loss (IRS, checked ). Profit on a personal item, or income from buying to resell, is taxable. General information, not tax advice.
What is the 1099-K threshold?
A marketplace must send a Form 1099-K when your payments for goods total over $20,000 in more than 200 transactions, and it may send one for less (IRS.gov, checked ).
If I don’t get a 1099-K, do I still report sales?
The IRS says to report income from selling goods whether or not you get a Form 1099-K (IRS.gov, checked ).
Sources
Every fee and rule above links to the official page it comes from. Facts checked ; next check . How we check.
- IRS: Understanding your Form 1099-K (checked Oct 21, 2026)
- IRS: What to do with Form 1099-K (checked Oct 21, 2026)
- IRS: Know the difference between a hobby and a business (checked Oct 21, 2026)