If you sell on eBay, 2026 is a good year to get serious about your numbers. Not just your sales numbers. Your expense numbers.

The reason is simple: taxes are generally based on profit, not just revenue. The more accurately you track your legitimate business expenses, the more accurately you can calculate what you actually earned. If you only look at payouts hitting your bank account, there's a good chance your profit looks much higher than it really is.

Important: BinFlip does not provide tax, legal, or accounting advice. This article is for general educational purposes only. Tax rules depend on your situation, state, entity type, and how you operate your business. When in doubt, talk to a qualified tax professional.

What eBay Sellers Need to Know in 2026

As of April 9, 2026, the big headline for many sellers is that the federal Form 1099-K threshold for 2025 sales was restored to the older rule: more than $20,000 in gross payments and more than 200 transactions. eBay says it will issue a 1099-K for 2025 if you cross that federal threshold, if backup withholding applied, or if your state has a lower reporting threshold.

That does not mean smaller sellers can ignore taxes. The IRS is clear that you must report taxable income even if you never receive a Form 1099-K. The form is a reporting document, not the rule that decides whether income is taxable.

There's another detail that trips people up: Form 1099-K reports gross payments. It is not reduced for fees, refunds, shipping, discounts, or other adjustments. That means your 1099-K can look much bigger than your actual profit, which is exactly why expense tracking matters.

Why Tracking Expenses Matters So Much

Let's say your eBay payouts for the year total $30,000. That sounds great until you start subtracting what it took to make those sales happen:

Expense Type Example Annual Amount
Cost of goods sold $9,000
eBay fees $3,900
Promoted Listings $900
Shipping labels $3,100
Boxes, tape, mailers, labels $650
Mileage for sourcing $1,200
Store subscription and software $500
Total tracked expenses $19,250

In that example, your rough profit is closer to $10,750, not $30,000.

That gap is the whole story. Every ordinary and necessary business expense you fail to track can make your business look more profitable than it really is. Good tracking helps you:

Expenses eBay Sellers Commonly Track

The IRS generally says deductible business expenses must be ordinary and necessary for your business. For many eBay resellers, that often includes expenses like:

Not every seller will qualify for every category, and some deductions have special rules. That's another reason clean records matter so much: you want a tax professional to have accurate numbers to work with.

Your 1099-K Is Not Your Profit

This is worth repeating because it causes confusion every year.

If eBay sends you a Form 1099-K, the number on it is usually a gross number. According to the IRS, it isn't adjusted for:

So if you sell a $40 item and eBay takes fees, you buy postage, and the buyer later gets a partial refund, the 1099-K can still reflect the gross payment activity instead of the amount you actually kept.

That is why casual tracking breaks down fast. If your records only show deposits, you are missing part of the tax picture.

2026 Estimated Tax Reality

If you're operating as a self-employed seller, the IRS generally says you'll file an annual return and may need to make estimated tax payments during the year. In general, individuals are expected to make estimated payments if they expect to owe at least $1,000 when they file.

For the 2026 tax year, the standard quarterly estimated payment dates are:

You don't want to guess at those payments using top-line sales. You want to estimate them using records that reflect your real income and your real business expenses.

What Good Tax Tracking Looks Like for an eBay Seller

A workable system does not have to be complicated, but it does need to be consistent. At minimum, you want records for:

  1. every item you bought and what you paid
  2. every sale and gross payment amount
  3. every eBay fee tied to that sale
  4. every shipping cost
  5. every supply purchase
  6. every mileage log or sourcing trip expense
  7. every subscription or overhead expense

You also want supporting documents. The IRS specifically emphasizes keeping records like receipts, invoices, paid bills, deposit information, credit card slips, and Forms 1099-K. In other words: don't just track totals. Track the backup too.

Why This Matters Even More for Resellers

Reselling businesses have a lot of small expenses that are easy to forget:

Miss enough of those and your "profit" becomes fiction.

This is one of the biggest reasons sellers think they're doing better than they really are. It's also why a tool built for resellers is helpful: when purchases, fees, shipping, and overhead are all tracked in one place, your year-end numbers are much easier to trust.

The Bottom Line

If you sell on eBay in 2026, don't just track sales. Track every legitimate business expense you can document.

That's how you get closer to your real profit. It's how you make sense of a 1099-K. And it's how you avoid building your business around numbers that are too optimistic.

BinFlip does not provide tax advice, and this article should not be treated as tax advice. But from a recordkeeping standpoint, the takeaway is simple: better expense tracking leads to better profit tracking, better tax prep, and fewer surprises.

If you want a cleaner way to connect your purchases, sales, fees, and expenses, BinFlip helps eBay sellers track their real profit. You can also read our guide on how to track your eBay reselling profits and our breakdown of what eBay fees actually cost per sale.