The short version
In July 2025 the One Big Beautiful Bill Act changed the federal Form 1099-K reporting rule back to what it was before 2022. A payment platform or online marketplace has to file a 1099-K for you only when your gross payments for goods or services are more than $20,000 and more than 200 transactions in a calendar year. The IRS says the change is retroactive, and it published FAQs confirming it in October 2025.
That replaces the phase-in the IRS had announced in late 2024 (Notice 2024-85): $5,000 for 2024, $2,500 for 2025 and $600 from 2026. Those lower numbers no longer apply at the federal level.
Two things did not change, and they are the reason this article exists:
- The IRS notes that a platform may still send you a 1099-K for smaller amounts, and that some states have lower reporting thresholds of their own. Check your state’s revenue department to see what applies to you.
- The IRS also says that whether or not you get a form, income from selling goods or services still has to be reported. What that means for your situation is a question for a tax professional, not for a fee calculator.
What the number on a 1099-K is (and isn’t)
Box 1a on a 1099-K is a gross figure. In the IRS’s own description, it does not include adjustments for fees, credits, refunds, shipping, discounts or cash equivalents, and it does not account for what you paid for the items. In practice, for a reseller, that gross number can include:
- Shipping the buyer paid, even when that money went straight to a prepaid label.
- Depending on the platform, amounts such as sales tax the marketplace collected. Platforms handle this differently, so read your platform’s own 1099-K help page.
- Sales that were later refunded, because refunds are not netted out of the gross.
- The full sale price before the platform took its commission and processing fees.
So the 1099-K total is not your profit, and it usually won’t match your bank deposits either. A $50 Whatnot item with $7 buyer-paid shipping, for example, puts $57 through the platform, but by our Whatnot calculator’s estimate the payout after Standard-tier fees is $44.05, before you account for what you paid for the item. Multiply that gap across a year of sales and the two totals can be far apart.
Why keep records if you may not get a form
A higher reporting threshold changes who receives a form. It does not change what records a business is expected to keep. If a form does arrive (from a lower state threshold, from a platform that sends them anyway, or because your sales grew), the useful question is whether you can explain the difference between its gross number and what you actually kept. That is far easier with records made during the year than with statements pieced together in April.
What to keep, sale by sale and month by month
- Cost of each item: receipts or notes showing what you paid and when. Platform exports such as Whatnot’s weekly orders report have a Cost of Goods column, but only if you filled it in.
- Platform fees: commission, processing, per-order fees and any sales tax charged on fees. Whatnot, eBay and the other marketplaces all offer fee reports or statements you can download.
- Shipping: what buyers paid, what labels cost, and shipping you covered yourself, such as free-shipping offers or giveaway labels.
- Refunds and returns, with the order they relate to.
- Supplies: mailers, boxes, tape, top loaders, printer labels.
- Mileage: date, purpose and miles for trips such as sourcing runs and post office drops.
- Marketplace-collected sales tax, if your platform reports it separately.
Keep the platform’s own exports alongside your notes. They are the closest thing to the figures the platform used. On Whatnot, the Seller Weekly Orders Report (Seller Hub, Financials, Statements) has one row per transaction with commission, processing and tax on fees. On eBay, the Transaction report under Payments has the fee columns; the Orders report does not. The fee rules behind our numbers, with official sources, are on the Fee Ledger.
Reconciling a 1099-K against your records
Reconciling means starting from the platform’s gross number and listing each item that explains the difference: refunds, buyer-paid shipping, marketplace-collected tax, and fees. Whatever is left unexplained is the part to look into, or to bring to your tax professional.
The Flip Profit HQ sheet includes a 1099-K Helper tab that does this layout for you: it puts the platform-reported gross next to your logged sales and lists those reconciling items. It is a record-keeping tool. It does not decide what is taxable or deductible, and it does not prepare a return. Those decisions belong with a qualified tax professional who knows your situation.
If you sell on several platforms, run a few typical sales through the fee comparison to see how far gross and payout drift apart on each one.
As of October 4, 2026, based on IRS Form 1099-K FAQs and Notice 2024-85. Record-keeping information only, not tax, legal or accounting advice; consult a qualified tax professional. Flip Profit HQ is not affiliated with the IRS or any marketplace.