You're a business now — act like one
The moment marketplace payouts lands on a 1099, the IRS puts you in the same category as any small business owner. That means self-employment tax, quarterly estimated payments — and the upside: you can deduct ordinary and necessary business expenses against what you earn.
Most resellers don't think of themselves as businesses, so they don't keep business records. Between sourcing, listing, and shipping, the costs pile up quietly — and the ones that never get recorded never get deducted.
The deductions most resellers can claim
1. Inventory
Cost of goods sold — the biggest line for resellers.
2. Marketplace fees
eBay, Poshmark, and Mercari fees plus payment processing.
3. Shipping supplies
Boxes, mailers, tape, and label printers.
4. Sourcing mileage
Thrift runs, estate sales, and retail arbitrage trips.
5. Storage
Storage unit or dedicated inventory space.
6. Phone and software
Listing tools, photo apps, and the business share of your phone.
What the IRS actually wants to see
Deductions aren't denied because they weren't real — they're denied because they weren't documented. The standard: a receipt or bank record for expenses, a mileage log with business purpose, and records made close to when the expense happened. A mileage log kept as it happens is worth far more than one reconstructed in April — the IRS knows the difference.
That's the workflow DeductionDog was built around: capture receipts by photo or by scanning your email, log drives automatically, then export the year as an accountant-ready package — every item mapped to its Schedule C line.
Related videos
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Video — the write-offs that slip through the cracks, and how to catch them.
Watch3 Tax Myths 1099 Workers Believe
Video — commute miles, the $600 rule, and what actually counts as income.
WatchThe 1099 Problem
Video — why gig workers overpay, and what poor records actually cost.
DeductionDog provides record-keeping software, not tax advice. Deduction eligibility depends on your specific facts — when in doubt, talk to a qualified tax professional.