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Why your 1099-K is higher than your profit

Updated October 30, 2026

If you sell on a platform such as eBay, Mercari or Poshmark, it may send you and the IRS a Form 1099-K. The number on it is usually much higher than what you actually made, and that’s expected: a 1099-K reports the gross payments you received, not your profit.

What’s in the 1099-K number

Gross payments include the item prices and usually the shipping your buyers paid. Depending on the platform, it may also include amounts that were never yours to keep. Nothing is subtracted: not the platform’s fees, not the shipping labels you bought, and not what the items cost you.

A worked example

Item sales$6,000.00
Shipping your buyers paid$420.00
Roughly what a 1099-K might show$6,420.00
− Platform fees$780.00
− Shipping labels you paid$400.00
− What the items you sold cost you$3,900.00
What you actually made$1,340.00

Same sales, two very different numbers. Your records are what bridge them, which is why it pays to log each buy and sale as it happens.

What to do with it

  • Keep a record of what each item cost, its fees and its label. KeepHawk’s flip notebook does this, and Exports totals it up in the order Schedule C lists it.
  • Read the IRS’s own page, Understanding your Form 1099-K, for who gets one this year and how to report it, including what to do if a 1099-K is wrong or covers personal items sold at a loss.
  • If you’re unsure, a tax professional is worth it: the IRS keeps a directory of credentialed preparers.

A plain explanation, not tax advice. Rules and thresholds change; the IRS page above is the current word.

Try it on a real itemSearch any item, add your resale price, and KeepHawk does this maths on every offer.Search an item

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