How Much Can I Sell on eBay without Paying Tax?

You just cleared out your closet, listed a few things on eBay, and the money is rolling in. Then a worried thought hits: how much can I sell on eBay without paying tax?

The short answer surprises most eBay sellers. There is no fixed dollar amount you can sell on eBay tax-free. What matters is whether you made a profit, not how much you sold.

You may have heard about a “$20,000 limit.” That number is real, but it controls paperwork, not taxes. It decides when eBay must send you and the IRS a Form 1099-K.

In this guide, you will learn the 2026 eBay tax rules in plain English. We’ll cover federal limits, state limits, sales tax, and simple ways to keep more of your money.

Sales vs. Profit: When Are eBay Sales Taxable?

The IRS does not tax your sales. It taxes your profit, which is what you earn after your costs.

Say you bought a jacket for $200 and sold it on eBay for $80. You lost $120, so you owe no income tax on that sale.

Now say you bought sneakers for $100 and sold them for $250. You made a $150 profit, and that profit is taxable income.

This rule applies from the very first dollar of profit. A small profit is still taxable, even if eBay never sends you a tax form.

So why do people talk about selling limits at all? The answer lies in a form called the 1099-K.

The eBay 1099-K Threshold for 2026: $20,000 and 200 Sales

Form 1099-K is a report of the money you received through eBay in a calendar year. eBay sends one copy to you and one to the IRS.

For 2026, eBay must send you a federal 1099-K only if you pass both limits. You need more than $20,000 in gross sales and more than 200 transactions.

This rule comes from the One Big Beautiful Bill Act, signed on July 4, 2025. It cancelled the planned $600 limit and brought back the old $20,000 and 200 rule for 2025 onward.

Both parts must be true. If you sell $30,000 across 150 orders, you get no federal form. If you sell $15,000 across 300 orders, you also get no form.

The form shows gross payments, which is the total before fees, refunds, and shipping costs. That is why the 1099-K number is usually higher than your real earnings.

If you run more than one eBay account under the same Social Security number, eBay adds them together. Splitting sales across accounts will not keep you under the limit.

Here is the key takeaway. Staying under $20,000 only means no federal form, not no tax. Your profit is still taxable either way.

State 1099-K Limits: Why You Might Get a Form Below $20,000

Some states set their own 1099-K limits, and eBay follows the stricter rule. Your state of residence decides which limit applies to you.

eBay lists these states as having lower reporting limits. The commonly reported amounts are:

• District of Columbia, Maryland, Massachusetts, Montana, Vermont, Virginia: about $600
• Illinois: $1,000 and at least 4 transactions
• New Jersey: $1,000
• Arkansas: $2,500
• Rhode Island: also on eBay’s lower-limit list

So a seller in Massachusetts with $9,000 in sales may get a 1099-K. A seller in Texas with the same sales would not.

State rules change often, so check your state’s revenue department each year. eBay’s 1099-K FAQ page is also a good place to confirm.

Getting a form, though, does not mean you owe tax. Whether you owe depends on what kind of seller you are.

Also Read: Vinted vs Depop: Which Reselling App is Better?

Personal Items, Hobby Sellers, and Business Sellers

The IRS sorts eBay sellers into three rough groups. Each group follows different tax rules.

1. Selling Your Own Used Stuff

Most people who sell old clothes, games, or gadgets sell them for less than they paid. A loss on a personal item is not taxable, and you cannot deduct it either.

If you get a 1099-K for these sales, do not ignore it. The IRS tells you to report the amount on Schedule 1, then subtract the same amount so it nets to zero.

If you sell a personal item for more than you paid, the gain is taxable. Collectibles like coins, art, and trading cards can face a capital gains rate of up to 28%.

2. Hobby Sellers

Some people flip items now and then for fun, not as a real business. Hobby profit is taxable and goes on Schedule 1 as other income.

You can subtract what you paid for the items you sold. However, you cannot deduct other hobby costs, like supplies or eBay fees.

3. Business Sellers

You are likely running a business if you buy items to resell, list often, and aim to profit. Business sellers report income and costs on Schedule C.

The upside is that you can deduct real costs. These include the cost of items, eBay fees, shipping, packing supplies, and mileage for sourcing trips.

The downside is self-employment tax of 15.3% on net profit. It applies once your net earnings reach $400 for the year.

A Quick Example

Maria sells $18,000 of thrifted clothing in 2026 across 350 orders. She does not pass the $20,000 limit, so she gets no federal 1099-K.

Her costs, fees, and shipping total $11,000, leaving $7,000 in profit. Maria still owes income tax and self-employment tax on that $7,000.

Income tax is only one part of the picture. Next comes sales tax, which works very differently on eBay.

Do eBay Sellers Have to Collect Sales Tax?

Good news: for most US sales, eBay handles sales tax for you. Under marketplace facilitator laws, eBay collects and pays sales tax in every state that has one.

The buyer pays the tax at checkout, and eBay sends it to the state. You do not need to add it to your price or file it yourself for those orders.

This only covers sales made through eBay. If you also sell on your own website or in person, you may need a sales tax permit in your state.

So US sellers can mostly relax about sales tax. But what if you sell from outside the United States?

Selling on eBay Outside the US: UK, EU, and Canada

Other countries use a different reporting system based on global OECD rules. The limits are far lower than the US $20,000 rule.

United Kingdom

eBay reports you to HMRC if you make 30 or more sales of goods or receive about £1,700 (€2,000) in a calendar year. eBay sends this data by 31 January of the next year.

Being reported does not mean you owe tax. If you are just selling your own used things, you are usually not trading at all.

If you are trading, the UK gives you a £1,000 trading allowance each tax year. Gross trading income up to £1,000 is tax-free, and you do not need to tell HMRC.

European Union

The EU uses rules called DAC7, with the same small-seller limit. eBay reports you if you make 30 or more sales or receive €2,000 or more in a year.

Canada

Canada follows similar platform reporting rules. Small sellers with fewer than 30 sales and under about C$2,800 in a year are generally not reported.

Wherever you live, one habit protects you from tax trouble. That habit is good record keeping.

6 Smart Ways to Lower Your eBay Tax Bill

You cannot sell your way around the tax rules. But you can make sure you only pay tax on your true profit.

1. Save proof of what you paid. Keep receipts, order emails, or photos of price tags. Without them, the IRS may treat your whole sale price as profit.
2. Track every eBay fee. Final value fees, promoted listing fees, and store fees all lower a business seller’s profit. Download your eBay transaction report each month.
3. Log shipping and supplies. Postage, boxes, tape, and printer labels are deductible business costs. They add up fast over a year.
4. Record sourcing miles. Drives to thrift stores, garage sales, and the post office can count. The IRS standard mileage rate turns those miles into a deduction.
5. Keep personal and business sales apart. Use a notes column or a separate account for personal items. This makes it easy to show which sales were losses.
6. Pay quarterly if you owe. If you expect to owe $1,000 or more for the year, the IRS wants estimated tax payments. Paying on time helps you avoid penalties.

A simple spreadsheet updated weekly is enough for most sellers. Tax software or a tax pro can then turn it into a clean return.

FAQs

How much can I sell on eBay before I get a 1099-K in 2026?

At the federal level, more than $20,000 in gross sales and more than 200 transactions. Your state may require a form at a much lower amount, often $600.

Do I have to pay taxes if I sell less than $600 on eBay?

Yes, if you made a profit. There is no tax-free sales amount. If you sold items at a loss, you owe nothing on those sales.

Does eBay report my sales to the IRS?

Yes, once you pass the federal limit, eBay files a 1099-K with the IRS. It also reports to your state if your state’s lower limit applies.

Do I pay tax on eBay sales of my own used items?

Usually not, because most used items sell for less than you paid. You only owe tax if an item sells for more than its original cost.

What if I get a 1099-K but had no profit?

Report the amount on your return anyway, then show your costs or the offsetting entry. This way the IRS sees why you owe no tax and does not send a mismatch letter.

Can I avoid taxes by using several eBay accounts?

No. eBay combines all accounts tied to the same tax ID. Hiding income can lead to penalties and interest.