Whatnot Taxes & 1099-K: The Complete Reseller Tax Guide for 2026

If you’re selling on Whatnot and made more than $600 this year, the IRS knows about it. In 2026, Whatnot is required to report your earnings via a 1099-K form if your total payments exceed $600 — and that threshold catches virtually every active seller on the platform. Whether you broke hobby boxes, auctioned vintage finds, or sold your personal collection, your Whatnot income is taxable.

This guide walks through everything Whatnot sellers need to know about taxes in 2026: how income is reported, what taxes you owe, what you can deduct, how to make quarterly payments, and when to hire a professional. We’ve written this for real Whatnot sellers — not accountants — so we’ll keep the IRS jargon to a minimum and the actionable advice to a maximum.

Table of Contents

• How Whatnot Reports Your Income to the IRS
• Understanding Your 1099-K from Whatnot
• Self-Employment Tax for Whatnot Sellers
• Federal Income Tax on Whatnot Earnings
• State Sales Tax and Marketplace Facilitator Laws
• Deductible Expenses for Whatnot Sellers
• Record Keeping Best Practices
• Quarterly Estimated Tax Payments
• Choosing the Right Business Structure
• Software for Tracking Whatnot Income and Expenses
• Handling Returns, Refunds, and Chargebacks
• What Happens If You Don’t File
• State-Specific Considerations
• Tax Changes Effective in 2026
• When to Hire a CPA vs DIY
• Whatnot Tax FAQ

How Whatnot Reports Your Income to the IRS

Starting in tax year 2024 and continuing into 2026, the IRS requires third-party payment platforms — including Whatnot, eBay, PayPal, Venmo, and others — to report seller payments on Form 1099-K when those payments exceed $600 in a calendar year. This is not new; it’s been the law since the American Rescue Plan Act of 2021, with full enforcement phased in by 2024.

What this means for you: If you received $600 or more in total payments through Whatnot during the 2025 tax year (filed in early 2026), or during 2026 (filed in early 2027), Whatnot will send both you and the IRS a 1099-K documenting your gross payment volume.

The old threshold was $20,000 and 200+ transactions. The new $600 threshold captures nearly every seller on the platform — even hobbyists who only sell occasionally.

Critical point: The 1099-K reports gross payments, not your profit. If you sold $15,000 worth of cards on Whatnot but spent $10,000 on inventory, the 1099-K shows $15,000. It’s your responsibility to document your costs and expenses to determine (and prove) your actual taxable income.

Understanding Your 1099-K from Whatnot

Whatnot issues 1099-K forms by January 31 of the following year. Here’s what’s on it and what’s not.

What’s Included in Your 1099-K

• Gross payment amount: Total payments received from all Whatnot sales, before Whatnot deducts their fees
• Payment by month: Monthly breakdown of payment volume
• Transaction count: Total number of payment transactions
• Your tax identification: SSN or EIN you provided to Whatnot

What’s NOT Included

• Whatnot fees and commissions — These are deducted from your payout but reported at the gross level on the 1099-K
• Shipping charges collected — Included in gross payments (you can deduct actual shipping costs as expenses)
• Refunds and returns — The 1099-K may or may not reflect refunds depending on timing. Refunds processed in a different tax year than the original sale require careful tracking
• Your cost of goods sold — The IRS has no idea what you paid for your inventory. That’s your job to document.

How to Access Your 1099-K

1. Log into Whatnot on the web at whatnot.com
2. Navigate to Settings > Tax Information
3. Download your 1099-K form (available by late January)
4. Whatnot also mails paper copies to your address on file

Verify your information before year-end. If your legal name, address, or tax ID is wrong in Whatnot’s system, your 1099-K will be wrong, and correcting it is a headache. Update your tax information in Whatnot’s seller settings before December 31.

When the 1099-K Doesn’t Match Your Records

Your 1099-K gross amount may not perfectly match what hit your bank account. Common reasons:

If the numbers are significantly different (more than 5%), contact Whatnot support to request clarification before filing.

Self-Employment Tax for Whatnot Sellers

If you’re selling on Whatnot with the intent to make a profit — and that describes virtually every regular seller — you’re operating a business in the eyes of the IRS. That means your net profit is subject to self-employment (SE) tax in addition to income tax.

What Is Self-Employment Tax?

Self-employment tax covers your Social Security and Medicare contributions. When you work a W-2 job, your employer pays half and you pay half. When you’re self-employed, you pay both halves.

Self-employment tax rate: 15.3% on net earnings from self-employment

• Social Security: 12.4% (on the first $168,600 of net earnings in 2026)
• Medicare: 2.9% (no income cap)
• Additional Medicare Tax: 0.9% on net earnings above $200,000 (single) or $250,000 (married filing jointly)

How It’s Calculated

Self-employment tax applies to your net profit — total revenue minus deductible business expenses. You do get to deduct 50% of your SE tax as an adjustment to gross income on your Form 1040, which reduces your income tax slightly.

Example:

• Whatnot gross revenue (1099-K): $50,000
• Cost of goods sold: -$30,000
• Other business expenses: -$5,000
• Net profit: $15,000
• SE tax (15.3% × 92.35% of net profit): $2,119

The 92.35% factor (you actually compute SE tax on 92.35% of net profit) exists because the employer-equivalent portion is deductible. The net effect is that your SE tax is approximately 14.1% of your net profit.

Know your actual profit before tax season. Underpriced tracks real market values so you can price inventory accurately and understand your true margins — not just your gross revenue.

Federal Income Tax on Whatnot Earnings

Beyond self-employment tax, your Whatnot net profit is also subject to federal income tax at your applicable bracket.

2026 Federal Tax Brackets (Projected)

Note: Exact 2026 brackets will be confirmed by the IRS. These are projected based on inflation adjustments to 2025 brackets.

Your Whatnot Income Stacks on Top

If you have a W-2 job earning $50,000 and your Whatnot business nets $20,000, your total taxable income is $70,000. The Whatnot income is taxed at the marginal rate for that combined income — meaning it’s taxed at the rate for $50,001-$70,000, not starting from zero.

For someone in the 22% bracket with $20,000 in Whatnot net profit:

• Federal income tax on Whatnot income: ~$4,400
• Self-employment tax: ~$2,826
• Total federal tax burden on $20,000 Whatnot profit: ~$7,226 (36.1%)

This is why many Whatnot sellers are shocked at their first tax bill. When you combine SE tax and income tax, the effective rate on self-employment income in the 22-24% brackets is 35-40%.

Estimated Tax Payments

If you expect to owe $1,000 or more in federal taxes from your Whatnot income, you’re required to make quarterly estimated tax payments. More on this in the Quarterly Estimated Tax Payments section below.

State Sales Tax and Marketplace Facilitator Laws

Here’s the good news about sales tax for Whatnot sellers: in most cases, you don’t have to worry about it.

Marketplace Facilitator Laws

As of 2026, all 45 states with sales tax (plus DC) have enacted marketplace facilitator laws. These laws require the marketplace (Whatnot) to collect and remit sales tax on behalf of sellers — not the sellers themselves.

What this means: Whatnot calculates, collects, and remits applicable state and local sales tax on your transactions. The buyer sees the sales tax added at checkout and pays it. Whatnot sends it to the state. You don’t need to register for a sales tax permit in every state, and you don’t need to file sales tax returns for your Whatnot sales.

Exceptions and Caveats

• Direct sales off-platform: If you sell cards or inventory directly (through your own website, at card shows, or via Facebook/Discord), you ARE responsible for collecting and remitting sales tax in states where you have nexus.
• Wholesale transactions: If you buy inventory at wholesale for resale, you need a resale certificate to avoid paying sales tax on your purchases. Most states issue these when you register for a state sales tax permit.
• Local add-ons: Some jurisdictions have local taxes that may not be fully covered by marketplace facilitator collection. This is rare but worth checking in your state.

States with No Sales Tax

If you live in Alaska, Delaware, Montana, New Hampshire, or Oregon, your state has no general sales tax. But you still owe federal income tax and self-employment tax on your profits.

Deductible Expenses for Whatnot Sellers

This is where your tax bill gets manageable. Every legitimate business expense reduces your net profit, which reduces both your income tax and self-employment tax. Here’s the comprehensive list for Whatnot sellers.

Cost of Goods Sold (COGS)

Your biggest deduction. COGS includes everything you spent to acquire the inventory you sold.

• Purchase price of cards, boxes, cases, collections
• Fees paid at auctions or estate sales to acquire inventory
• Import duties or customs fees on international purchases
• PSA/BGS/SGC grading fees for cards you graded and sold
• Costs to acquire sealed product (hobby boxes, retail product)

Tracking tip: Every item you buy for resale needs a documented purchase record — date, source, amount paid, and description. A spreadsheet works. An inventory app works better.

Whatnot Fees and Commissions

Whatnot’s seller commission (8%), payment processing fees (2.9% + $0.30), and any promotional fees are fully deductible business expenses. These are not separately reported on your 1099-K — you need to track them yourself from your Whatnot seller dashboard.

How to find your total fees: In your Whatnot seller dashboard, go to Payment History or Earnings and export your transaction history. Sum up all fees deducted.

Shipping Supplies and Postage

• Bubble mailers, padded envelopes, boxes
• Tape, labels, “Do Not Bend” stickers
• Toploaders, penny sleeves, one-touch holders (used for shipping, not personal collection)
• Team bags, semi-rigid holders
• USPS postage, PirateShip labels, UPS/FedEx charges
• Shipping insurance premiums
• Scale and label printer

Camera and Streaming Equipment

• Camera or webcam purchases
• Tripod, overhead mount, articulating arm
• Ring light, LED panels, softboxes
• Microphone (if separate from camera)
• Green screen or backdrop materials
• Card display stands, playmats

Depreciation note: Equipment costing over $2,500 per item may need to be depreciated over multiple years rather than expensed immediately under standard depreciation rules. However, the Section 179 deduction allows most small businesses to deduct the full cost of qualifying equipment in the year of purchase (up to $1.16 million in 2026). A webcam and lights easily qualify for immediate expensing.

Internet and Streaming Costs

• Internet service: Deduct the business-use percentage of your monthly internet bill. If you stream from home and use internet 40% for business, deduct 40%.
• Upgraded internet speed specifically for streaming: the incremental cost above your prior plan may be 100% deductible
• Cell phone hotspot data used for mobile streaming

Phone and Tablet

If you use your phone or tablet for Whatnot streaming, photography, inventory management, or customer communication, the business-use percentage is deductible.

• Device purchase price (business-use %)
• Monthly phone plan (business-use %)
• Screen protectors, cases, and accessories used during shows

Home Office Deduction

If you use a dedicated space in your home exclusively and regularly for your Whatnot business (streaming, inventory storage, shipping), you qualify for the home office deduction.

Two methods:

Regular method expenses include: Mortgage interest or rent, utilities, homeowner’s insurance, property taxes, repairs, depreciation on the home.

Mileage for Sourcing Trips

Driving to estate sales, card shops, post offices, retail stores for inventory, or card shows is deductible. In 2026, the IRS standard mileage rate is projected at approximately $0.70 per mile (exact rate announced each January).

Track every trip: Use a mileage app like MileIQ, Stride, or Everlance. Record the date, destination, purpose, and miles driven. The IRS is strict about mileage documentation — “I drove a lot” doesn’t cut it.

Example: 200 miles/month of sourcing trips × $0.70 × 12 months = $1,680 annual deduction

Storage Costs

• Self-storage unit rental for inventory overflow
• Shelving, bins, and organizational supplies
• Climate control costs (relevant for card storage)

Returns, Refunds, and Loss

• Refunds issued to buyers reduce your net revenue (and your tax liability)
• Cards lost or damaged in shipping (not covered by insurance) are a deductible loss
• Inventory that becomes worthless (damaged cards, market crashes on specific players) can be written off

Giveaway Costs

Cards or items given away during shows as marketing/promotional tools are deductible marketing expenses. Track the cost basis (what you paid for the card), not the market value.

Props and Display Materials

• Custom Whatnot overlays and graphics
• Branded playmats and backgrounds
• Signage, banners, and branding materials
• Display cases for graded cards during shows

Professional Services and Subscriptions

• CPA or tax preparer fees
• Legal fees (LLC formation, contracts)
• Bookkeeping software subscriptions (QuickBooks, Wave, etc.)
• Card pricing tools (Beckett Online, Card Ladder, 130point Pro)
• Inventory management software
• Discord Nitro (if used for business community)
• Design tools (Canva Pro for thumbnails and graphics)

Education and Training

• Courses on reselling, live selling, or card valuation
• Books and guides on sports card investing
• Conference or trade show attendance (National Sports Collectors Convention, card expos)
• Travel expenses for trade shows (if primarily business-related)

Use our ROI Calculator to factor tax implications into your actual profit calculations on every flip.

Record Keeping Best Practices

The IRS requires you to maintain records supporting everything on your tax return. For Whatnot sellers, that means documenting both sides of every transaction — what you paid and what you received.

What to Track

Minimum Retention Period

Keep all tax-related records for at least 3 years from the date you file your return. If you underreport income by more than 25%, the IRS can audit up to 6 years back. In cases of fraud or non-filing, there’s no statute of limitations.

Practical recommendation: Keep records for 7 years. Storage is cheap; IRS problems are expensive.

Monthly Reconciliation

At the end of each month:

1. Export your Whatnot sales and payment history
2. Reconcile Whatnot payouts to your bank deposits
3. Categorize and log all business expenses
4. Update your inventory spreadsheet
5. Calculate month-to-date profit/loss

This monthly discipline saves you from a panic-inducing shoebox of receipts come April.

Track smarter, not harder. Underpriced keeps market data at your fingertips so you always know what your inventory is worth — critical for accurate COGS tracking and tax reporting.

Quarterly Estimated Tax Payments

If your Whatnot business generates consistent income, you likely need to make quarterly estimated tax payments. Failing to do so results in underpayment penalties.

Who Needs to Pay Quarterly?

You must make estimated tax payments if:

1. You expect to owe $1,000 or more in federal tax for the year (after subtracting withholding from any W-2 jobs), AND
2. You expect your withholding and credits to be less than the lesser of 90% of the current year’s tax or 100% of last year’s tax (110% if AGI exceeds $150,000)

In plain English: if you’re making real money on Whatnot without a W-2 job withholding enough to cover it, you need to pay quarterly.

2026 Quarterly Due Dates

How to Calculate Your Quarterly Payment

Simple method (safe harbor): Take last year’s total tax liability, divide by 4, and pay that amount each quarter. This avoids underpayment penalties regardless of how much you actually owe.

Current-year method: Estimate your quarterly net profit, calculate the combined SE tax + income tax, and pay that amount. More accurate but requires disciplined tracking.

Example quarterly calculation:

• Q1 Whatnot net profit: $5,000
• SE tax (14.1%): $705
• Federal income tax (22% bracket): $1,100
• Q1 estimated payment: $1,805

How to Pay

• IRS Direct Pay: Pay at irs.gov/payments using your bank account (free)
• EFTPS: Electronic Federal Tax Payment System — set up in advance at eftps.gov
• IRS2Go app: Mobile payments
• Mail: Send a check with Form 1040-ES voucher (slowest method)

W-2 Withholding Hack

If you also have a W-2 job, you can increase your withholding at your employer to cover your estimated Whatnot taxes. Submit a new W-4 with additional withholding. This avoids the hassle of quarterly payments and the penalty risk of underpaying.

Choosing the Right Business Structure

Your business structure affects your tax liability, personal liability exposure, and administrative burden. Here’s how each option applies to Whatnot sellers.

Sole Proprietorship

What it is: The default structure. If you’re selling on Whatnot without forming a separate entity, you’re a sole proprietor.

Best for: New sellers, side-hustle sellers earning under $20,000/year net profit.

LLC (Limited Liability Company)

What it is: A separate legal entity that provides liability protection while maintaining pass-through taxation (by default, a single-member LLC is treated as a sole proprietorship for tax purposes).

Best for: Sellers earning $2,000+/month, anyone buying collection lots or operating at card shows where liability risk exists.

Formation cost by popular states:

S-Corporation (S-Corp Election)

What it is: An LLC (or corporation) that elects S-corp tax treatment. The key advantage: you split your income between a “reasonable salary” (subject to SE tax) and “distributions” (not subject to SE tax).

Best for: Sellers with net profit consistently above $50,000-$60,000 annually. Below that threshold, the accounting costs typically outweigh the SE tax savings.

S-Corp savings example:

• Net profit: $80,000
• Reasonable salary: $40,000 (subject to SE tax: $6,120)
• Distribution: $40,000 (NO SE tax — saves $5,652)
• Accounting cost for S-corp: ~$2,000
• Net savings: ~$3,652/year

For a deeper dive into reseller tax structures, see our Reseller Tax Guide.

Software for Tracking Whatnot Income and Expenses

Manual spreadsheets work, but dedicated software saves time and reduces errors as your volume grows.

Recommended Software

What to Prioritize

1. Bank account connection — Automatically imports transactions
2. Receipt scanning — Snap photos of receipts; the app extracts and categorizes them
3. Category tracking — Maps to IRS Schedule C categories
4. Mileage tracking — GPS-based automatic tracking
5. Tax report generation — Produces Schedule C or exports to CPA

For a complete comparison of accounting tools for resellers, including QuickBooks alternatives, see our guide to Reseller Accounting Software.

Handling Returns, Refunds, and Chargebacks

Returns and refunds happen in every selling business. Here’s how they affect your taxes.

Refunds Reduce Your Taxable Income

If you refund a buyer, that refund reduces your gross revenue for tax purposes. If the sale and refund happen in the same tax year, it’s straightforward — just subtract refunds from your gross sales.

Cross-Year Refunds

If a sale happens in December 2025 and the refund processes in January 2026, it gets complicated:

• 2025 taxes: Report the sale as income (it’s on your 2025 1099-K)
• 2026 taxes: Claim the refund as a deduction or adjustment on your 2026 return
• Alternative: Amend your 2025 return (Form 1040-X) to remove the income. This is only worth doing for significant amounts.

Chargebacks

When a buyer disputes a charge with their bank and wins, you lose the sale amount plus a chargeback fee (typically $15-25). The lost sale is an adjustment to revenue, and the chargeback fee is a deductible business expense.

Damaged/Lost Shipments

If an item is lost or damaged in transit and you refund the buyer:

• The refund reduces your gross revenue
• If you receive insurance reimbursement, that’s income
• If you don’t receive insurance reimbursement, the lost inventory is a deductible business loss (cost basis of the item)

What Happens If You Don’t File

Not filing taxes on Whatnot income is a terrible strategy. Here’s why:

The IRS Knows

Whatnot sends the IRS a copy of your 1099-K. The IRS’s Automated Underreporter (AUR) program matches 1099-K forms against filed returns. If your 1099-K shows $30,000 in payments and you didn’t report self-employment income, the AUR flags it automatically.

Penalties for Not Reporting

Timeline of IRS Action

1. Months 1-6 after filing deadline: Automated matching identifies discrepancy
2. CP2000 Notice: IRS sends a notice proposing additional tax, often inflated because they assume ALL gross 1099-K revenue is profit (no deductions)
3. 30-day response window: You can respond with documentation showing your actual expenses and profit
4. If you ignore it: The IRS assesses the proposed tax, adds penalties and interest, and begins collection actions (wage garnishment, bank levy, tax lien)

The worst outcome: Getting a CP2000 notice where the IRS treats your entire $50,000 in gross Whatnot payments as profit because you never filed and can’t prove your expenses. The tax + SE tax + penalties + interest on $50,000 of “phantom profit” can easily exceed $20,000.

Bottom line: File your taxes. Track your expenses. The tax system is designed so that you only pay on actual profit — but you have to do the work of documenting it.

State-Specific Considerations

While federal taxes are uniform, state tax treatment varies significantly. Here are key considerations by situation:

States with No Income Tax

If you live in Alaska, Florida, Nevada, New Hampshire (investment income only), South Dakota, Tennessee (investment income only), Texas, Washington, or Wyoming — you owe no state income tax on Whatnot earnings. You still owe federal income tax and SE tax.

High-Tax States to Watch

State Estimated Tax Payments

Most states with income tax also require quarterly estimated payments mirroring the federal schedule. Check your state’s department of revenue website for specific forms, due dates, and thresholds.

Local Taxes

Some cities and counties impose local income taxes or business taxes:

• Ohio: Municipal income taxes in most cities (1-3%)
• Pennsylvania: Local earned income tax (varies by municipality)
• New York City: Additional income tax on residents
• Portland, OR: Arts tax, Metro supportive housing tax

Business License Requirements

Some states and localities require a business license to operate — even for online sellers. Common requirements include:

• State business license or registration
• Local business license or home occupation permit
• Resale certificate (for purchasing inventory tax-free)

Tax Changes Effective in 2026

The 2026 tax year brings several confirmed and projected changes that directly affect Whatnot sellers. Here’s what you need to know.

The $600 1099-K Threshold Is Fully Enforced

After years of delays and phase-in periods, the $600 1099-K reporting threshold is now fully in effect with no further deferrals. Every third-party payment platform — including Whatnot, eBay, PayPal, and Venmo — is required to issue a 1099-K to any seller who receives $600 or more in gross payments during the calendar year. The IRS has confirmed there are no additional transition periods or higher thresholds for 2026. If you sell on Whatnot, you are almost certainly receiving a 1099-K.

Updated IRS Standard Mileage Rate

The IRS standard mileage rate for business use is projected at approximately $0.70 per mile for 2026, reflecting continued increases in fuel and vehicle maintenance costs. If you drive to source inventory — card shops, estate sales, post offices, retail stores, card shows — every mile is deductible at this rate. At 3,000 miles of sourcing trips per year, that’s a $2,100 deduction that directly reduces your taxable profit.

Section 179 Deduction Limit Increase

The Section 179 deduction limit for 2026 is projected at approximately $1.22 million, up from $1.16 million in 2025. This allows small businesses to deduct the full purchase price of qualifying equipment — cameras, lighting, computers, streaming gear, shelving, label printers — in the year of purchase rather than depreciating over multiple years. For most Whatnot sellers, this means any equipment you buy for your streaming setup can be fully expensed immediately.

State-Level Digital Goods Taxation

A growing number of states are expanding their sales tax to cover digital goods and services. States including Pennsylvania, Washington, and Connecticut now tax digital downloads, streaming services, and certain SaaS products. While this doesn’t directly affect your Whatnot sales (marketplace facilitator laws handle that), it may affect the deductibility and cost of digital tools you use for your business — streaming software subscriptions, design tools, and digital inventory management platforms could carry additional state sales tax that becomes part of your deductible expense.

Potential Self-Employment Tax Rate Changes

Tax legislation passed or proposed in late 2025 and early 2026 could impact self-employment tax rates, particularly around the Social Security wage base cap (projected at approximately $174,900 for 2026) and potential adjustments to the Medicare surtax threshold. No changes to the core 15.3% SE tax rate have been enacted as of February 2026, but sellers earning above $200,000 should stay alert for any mid-year legislative updates that could affect the Additional Medicare Tax.

Q1 Estimated Tax Reminder

March 2026 is the ideal time to calculate your Q1 estimated tax payment. Your first quarterly payment for tax year 2026 is due April 15, 2026. Review your January–March Whatnot earnings, subtract your documented expenses, and calculate 30–40% of net profit as your estimated payment. Paying on time avoids underpayment penalties and keeps you on track for the rest of the year. Use IRS Direct Pay at irs.gov/payments for the fastest and easiest method.

When to Hire a CPA vs DIY

DIY Tax Filing Is Fine If:

• Your Whatnot income is under $20,000 gross revenue
• You’re a sole proprietor (no LLC/S-corp)
• You sell on 1-2 platforms only
• You’re comfortable with tax software (TurboTax Self-Employed, FreeTaxUSA, H&R Block)
• Your business expenses are straightforward
• You keep clean records throughout the year

Hire a CPA If:

• Net profit exceeds $50,000 annually
• You’re considering or have an LLC/S-corp
• You sell across multiple platforms (Whatnot, eBay, Mercari, card shows)
• You have complex inventory valuation situations (large collection purchases, estate buys)
• You’ve received an IRS notice or are being audited
• You have multi-state tax obligations
• You want to optimize your tax strategy beyond basic deductions
• You’re not confident in your bookkeeping accuracy

What a CPA Costs

Finding a Reseller-Friendly CPA

Not all CPAs understand reseller businesses. Look for:

• Experience with e-commerce and online selling
• Familiarity with 1099-K reporting and COGS for inventory businesses
• Comfort with home office deductions and mileage
• Willingness to communicate via email/video call (not just in-person)

Ask in Whatnot seller Discord communities, Facebook reseller groups, or Reddit’s r/Flipping for CPA recommendations in your area.

Make tax time easier. Underpriced helps you track real market values for every item you buy and sell — giving you accurate COGS numbers when it’s time to file.

Whatnot Tax FAQ

Q: Do I have to pay taxes on Whatnot sales if it’s just a hobby? A: If you’re selling items at a loss (personal collection, not for profit), you report the sales but don’t owe tax on them. However, you also can’t deduct hobby losses against other income. If you’re regularly buying inventory to resell at a profit, the IRS considers that a business, not a hobby.

Q: What if I sold less than $600 on Whatnot? A: You won’t receive a 1099-K, but you’re still legally required to report all income. The $600 threshold is just the reporting requirement for Whatnot — it doesn’t affect your tax obligation.

Q: Can I deduct cards I bought but didn’t sell yet? A: Unsold inventory isn’t deducted until the year it’s sold (COGS is based on what you sold, not what you bought). Unsold inventory is carried as an asset on your balance sheet.

Q: Do I need a business license to sell on Whatnot? A: Whatnot doesn’t require a business license, but your state or locality might. Check your local requirements, especially if you want a resale certificate for tax-free inventory purchases.

Q: What if my Whatnot 1099-K amount is wrong? A: Contact Whatnot support to request a corrected 1099-K. If they don’t correct it before you need to file, report the correct amount on your return and keep documentation explaining the discrepancy.

Q: Can I use Whatnot fees as a tax deduction? A: Yes. Whatnot’s seller commission and payment processing fees are fully deductible business expenses. Download your fee summary from your Whatnot seller dashboard. Use our Whatnot Fee Calculator to estimate fees on future sales.

Q: What about giveaways — are those tax deductible? A: Yes. The cost basis of items given away as promotional giveaways during shows is deductible as a marketing/advertising expense. Keep records of what you gave away and what you originally paid for it.

Q: I sell on multiple platforms. Do I combine all my 1099-Ks? A: Yes. All your self-employment income from all platforms (Whatnot, eBay, Mercari, etc.) is reported together on one Schedule C. You’ll receive separate 1099-Ks from each platform, and your combined revenue minus combined expenses equals your net profit.

Q: How do I handle sales tax on my Whatnot purchases (buying inventory from other sellers)? A: If you buy inventory from another Whatnot seller and pay sales tax, that sales tax is part of your cost basis (COGS) for that item. If you have a resale certificate, you may be able to buy inventory tax-exempt from certain sources.

What’s new for Whatnot taxes in 2026?

The biggest change for 2026 is the fully enforced $600 1099-K reporting threshold. After multiple IRS delays and transitional phase-in periods, the $600 threshold is now permanent with no further deferrals — meaning virtually every active Whatnot seller will receive a 1099-K. Beyond the reporting threshold, the projected standard deduction for 2026 is approximately $15,000 for single filers and $30,000 for married filing jointly, reflecting inflation adjustments. These higher standard deductions help offset taxable income if you don’t itemize. Finally, remember that your Q1 estimated tax payment is due April 15, 2026 — if you’ve been selling on Whatnot since January, now is the time to tally your net profit for Q1 and submit your estimated payment to avoid underpayment penalties.

Can I deduct Whatnot subscription tools and software?

Yes — any software, apps, or digital subscriptions you use for your Whatnot selling business are fully deductible as ordinary and necessary business expenses under IRS guidelines. This includes pricing and comp research tools like Underpriced, inventory management software, accounting and bookkeeping apps (QuickBooks, Wave, Keeper), streaming software subscriptions (OBS plugins, Streamlabs, Ecamm), graphic design tools (Canva Pro), mileage tracking apps (MileIQ, Stride), and any other SaaS products directly related to running your reselling operation. Deduct the full annual or monthly cost on Schedule C under “Other Expenses” or “Office Expenses.” If a tool is used for both personal and business purposes, deduct only the business-use percentage.

Final Thoughts

Taxes are the least exciting part of selling on Whatnot, but they’re also the part that can destroy your profitability if ignored. The sellers who build sustainable businesses on Whatnot treat taxes as a known cost — budgeting 25-40% of net profit for combined federal and state taxes, tracking every expense, and making quarterly payments to avoid ugly surprises in April.

The three non-negotiable actions every Whatnot seller should take:

1. Track everything in real time — purchases, sales, fees, expenses, mileage. Don’t wait until tax season.
2. Set aside 30% of net profit immediately — transfer it to a separate savings account after each payout. Don’t spend your tax money.
3. Make quarterly estimated payments — the penalty for underpaying is avoidable and pointless.

For complete guidance on running your Whatnot business beyond taxes, check out our Complete Guide to Selling on Whatnot, learn proven Whatnot Live Selling Strategies, understand Whatnot fees in detail, and discover what to sell on Whatnot across every category.

Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or financial advice. Tax laws change frequently. Consult a qualified tax professional for advice specific to your situation. Information is current as of February 2026.