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Reseller Tax Deductions: What You Can Write Off
If you resell for profit, you pay tax on your profit, not on everything you sell. Every cost you can show lowers that profit. Here's what US resellers can usually write off, where each item goes on Schedule C, and the records to keep.
First: inventory isn't an expense when you buy it
What you pay for items to resell goes into cost of goods sold (Schedule C, Part III), not into your expenses. Only the cost of the items you actually sold that year counts against your income. Items still on your shelf on December 31 carry over to next year.
Cost of goods sold = inventory at the start of the year + inventory bought during the year − inventory left at the end of the year
Example. You start the year with $800 of unsold stock, buy $3,000 more, and finish with $1,100 still unsold. Your cost of goods sold is $800 + $3,000 − $1,100 = $2,700.
What resellers can usually write off
| Expense | Examples | Schedule C line |
|---|---|---|
| Platform and selling fees | Final value fees, payment processing, store subscriptions | 10 Commissions and fees |
| Ads | Promoted listings, boosts | 8 Advertising |
| Shipping supplies | Boxes, mailers, tape, bubble wrap, label paper | 22 Supplies |
| Postage | Labels you pay for | 27a Other expenses |
| Car and truck | Business miles at the IRS rate, plus parking and tolls | 9 Car and truck |
| Small equipment | Label printer, scale, lights, clothing rack | 22 Supplies (big items may need depreciation, line 13) |
| Software and apps | Crosslisting tools, photo apps | 27a Other expenses |
| Office supplies | Printer ink, paper | 18 Office expense |
| Phone and internet | Your business share only | 25 Utilities |
| Storage | A storage unit used for stock | 20b Rent: other business property |
| Cleaning and repair supplies | Detergent, steamer, glue, polish | 22 Supplies |
| Education | Reselling courses and books | 27a Other expenses |
| Tax prep | Accountant, tax software | 17 Legal and professional |
| Licenses | Business license, sales tax permit | 23 Taxes and licenses |
| Business meals | Only 50% counts | 24b Meals |
| Home office | A space used only and regularly for the business | 30 Business use of home |
Don't forget the fees platforms already took
The yearly totals platforms report (including on Form 1099-K) are usually gross: the full amount buyers paid, before fees. If you report that number and forget to deduct the fees and shipping, you pay tax on money you never kept. Download each platform's yearly sales report and use it to fill in fees and shipping.
Mileage: often the biggest write-off people miss
Driving to thrift stores, estate sales, the post office and the supply store adds up fast. With the standard mileage rate, you deduct 72.5 cents a mile for 2026 (70 cents for 2025), plus business parking and tolls. Three trips a week, 8 miles each way, comes to about 2,400 miles, or a $1,740 deduction. You need a log of each trip. See how to keep a mileage log, or estimate yours with the free mileage deduction calculator.
Home office, the simple way
If part of your home is used only and regularly for the business (packing, photos, storing stock), the simplified method lets you deduct $5 per square foot, up to 300 square feet, so up to $1,500. A corner of the kitchen table you also eat at doesn't count.
What you can't write off
- Personal purchases, even if you bought them on the same trip.
- Unsold inventory: it waits in cost of goods sold until it sells.
- Your own time.
- Clothes you wear yourself.
- Gas and car repairs on top of the standard mileage rate. The rate already covers them.
Records to keep
- Receipts for everything you claim: a photo or an email copy is fine.
- A mileage log: date, where, why and miles for each trip.
- Each platform's yearly sales and fee report.
- Your inventory count at the start and end of the year.
Keep them for at least three years after you file.
Common questions
Do I have to pay tax on reselling?
If you buy things to resell for a profit, the profit is taxable income. Selling your own used items for less than you paid for them usually isn't. Good records let you pay tax only on what you actually kept.
Can I deduct the items I buy to resell?
Yes, but through cost of goods sold, not as an expense when you buy them. Only the cost of items that sold during the year counts against that year's income.
Are eBay and Poshmark fees tax deductible?
Yes. Selling fees, payment processing fees and store subscriptions are business expenses. The totals platforms report are often gross, before fees, so make sure you deduct the fees yourself.
What is the mileage rate for resellers in 2026?
The IRS business standard mileage rate is 72.5 cents a mile for 2026. It was 70 cents for 2025.
Do I need to pay self-employment tax on reselling profit?
Generally, if your net profit from self-employment is $400 or more in a year, you owe self-employment tax as well as income tax. A tax professional can confirm for your situation.
For information only, not tax advice. Tax rules depend on your situation and change over time. Check IRS.gov or ask a tax professional before you file. Rates checked October 2026.