Doing Your TAXES For Poshmark & Other Online Resell Apps

TAX SEASON IS COMING UP!!! I know what you’re thinking, what do I do if I made money one Poshmark? Do I need to file taxes? How do I do it? WHAT DO I DO?!?!?! Short of having a panic attack, we are here to help and guide you to some basic answers to get you on your way to staying in the clear when it comes down to tax time! Just as a note, this blog post is just BASIC info. This isn’t going to go into too much depth, because everyone’s situation is different, and unique. But if you’re looking to get more specific questions answered, there will be info at the end of this post!

This has been one of the most asked questions and requested blog posts as of late. So I was able to compile a small questionnaire featuring Kreithchele Barnard (@krangele on Poshmark) who was a workshop speaker at this past 2016 Poshfest, she is also a CPA (inactive) with an MBA and elective studies in Taxes and Business Strategy. Currently she is teaching accounting at Santa Ana College in Santa Ana, CA and is working on her online course Accounting For Your Fashion Resale / Boutique. Her workshop was the most sought after at Poshfest but unfortunately was cut rather short due to delays. So thankfully, I have her here with me answering a few basic questions that I have accumulated from other users to help you decide what to do come tax season.

Poshmark Taxes.jpg
Tax season is up ahead, and you need to know how to file if you are making money on Poshmark.
HGF – The BIG question everyone is asking around this time is: Should I be filing taxes to include my Poshmark sales?
KB – Yes.  Anytime you have income from any source you should include in your income. However, if you have a loss be careful.  The IRS doesn’t like to see losses on a schedule C to offset income.
Basic Definitions:
Formula –>  Sales – Expenses = Income / Loss
  • Sales (what you sell items for)
  • Expenses (what you spend for your items and everything for your business)
  • Income is when you sell more than you spend
  • Loss is when you sell less than you spend
  • For Example: Sales $5000 – Expenses $6000 = loss $1000

HGF – Without going too much into detail, what are some basic things people should be tracking if they do plan on writing things off?
KB – Pretty much everything – anything you buy that goes into your business.  Office / shipping supplies, cell phone bill, gas, etc.  If you go to an event that is Poshmark related such as a Meetup, or Poshfest – registration fees, hotel, travel, etc.
HGF – How important is keeping track of your sales, profit, and investments for newbies?
KB – Depends on where you’re at -if you’re doing it as a hobby, for fun or don’t care what you make, then it’s not important.  But if your activities are headed towards business, then it’s important so that you know what to report for income taxes and sales taxes.  If you’re selling stuff from your own closet and basically selling it at less than you bought it for then it’s really a hobby. But if you start buying stuff with the intention of selling it for profit, then you’re going into business mode.  This includes thrifting.  If you go to Goodwill and buy something with the intent to resell then you’re really into business mode.
poshmark-taxes-flat-lay
What forms do you need if you are filing your Poshmark income for your taxes?
HGF – At what point should someone get a business license?
KB – If you are conducting ANY type of business you need a business license.  So get one when it’s no longer a hobby and when you’re buying stuff to resell/flip.
HGF – How would someone file their taxes if they are going to claim their earnings from Poshmark?

KB- Depends on the type of entity your activities or business is – if it’s a sole proprietorship, LLC, or S-Corp.

  • Sole Proprietorship – schedule C on personal tax return
  • LLC – depends on how many members – single member LLC? Then it’d be on your personal tax return
  • S-Corp – income flows through to personal tax return
HGF- Items above aren’t covered here in detail at HealthyGirlFashion.com but if you’d like to know more, then you can pre-purchase Kreithchele’s Accounting For Your Fashion Resale / Boutique Online Course.
HGF – Where can I go to take your Online Course?

KB – The course will be available in May and already has an active private Facebook Group.

HGF – For those who have purchased the course, they can ask questions, have discussions, etc. She also does a Facebook livestream for any questions that anyone in the group has.  The course is $147 + $25 for Facebook Group access, but currently taking pre-orders for $62 (Course & FB Group) with full access to the Facebook group and discussions NOW. The pre-order price of $62 will be available until March 2017 so book now!

  1. To secure the $62 price, make a payment of $62 to paypal.me/KBBusinessConsulting and put HealthyGirlFashion + Your email in the notes
    screen-shot-2017-02-09-at-2-46-14-pm
  2. Once Kreithchele receives the PayPal confirmation, she will:
    1.  Add you to the Facebook group (if you’re already Facebook friends with her)
    2. Invite you to the group (if you’re not Facebook friends with her)
  3. When the course is ready, you will receive a code to grant you access to the course at no additional charge (since you  are pre-paying now).

HGF – There you have it ladies! Sign up as soon as you can to get that course, because we all know you’re thrifting and selling, and making some big cash! Don’t neglect your taxes! I personally have already signed up for the course and am ready to go, so I hope you sign up too! I mean, where can you get someone readily available to answer your accounting/tax/business questions, get a quick answer right away, with a set course, Facebook group & discussions + is a Posher herself?!

I personally would like to thank Kreithchele for answering a few questions for us here are HGF. If you have some burning questions, put them down below in the comments I’ll get them answered as quick as I can!

Also- please put down your closet name below! We love checking out your closets!

Stay Healthy,

-E

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4 thoughts on “Doing Your TAXES For Poshmark & Other Online Resell Apps”

  1. Thank you for another great informational post Ediza. My closet is @flippinfabulous. I have a question. Occasionally I will see someone offering FREE shipping in their closet. Just wondering how can you do that if the shipping automatically comes up when you sell something?

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    1. When a buyer asks you for free shipping, then they’re asking you to lower the price of your listing to subtract the cost of shipping. It’s up to you to do that, but I would just have them make an offer of that price. Otherwise they may not buy after you lower.

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  2. Thank you both so much for sharing this with us! I, for one, am a little clueless when it comes to this side of the business and found this very helpful. There you go again Ediza bringing us another awesome & relevant post! 💕

    Liked by 1 person

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