Starting in 2022, all online marketplaces, including Kidizen, are required by the IRS to report a seller's total gross sales that exceed $600 and provide a 1099-K to sellers meeting these criteria. While the amount that sellers are supposed to report as income has not changed, Kidizen will now file a 1099-K with the IRS and applicable states if you meet this threshold.
For most sellers on Kidizen, this does not mean that you will necessarily owe taxes, particularly if you originally paid more for the items than the amount for which you sell them (for example, if you purchased an item for $50, and then sell it for $20, you should not owe taxes on this sale). You may also have other deductions associated with your sales on Kidizen that will reduce the amount you owe, if anything. We have put together a FAQ to help sellers navigate this new change. We recommend consulting your tax professional to help determine what you can deduct and any additional questions you may have.
As a seller, you will receive the following notifications from Kidizen:
- Once you hit $300 in sales: you will be prompted to enter your tax information
- Once you hit $500 in sales: if you have not entered your tax information, your account will be placed on hold
- Once you hit $600 in sales: if you have not entered your tax information, your account will be further restricted until we receive valid tax information
If you meet any of these thresholds, you will have one week from today to enter your tax information before any limitations are placed on your account.
This change impacts millions of casual sellers across all online marketplaces, not just Kidizen, seeking to make extra money by clearing out items in their homes. We believe that the new 1099-K threshold puts an unnecessary burden on those working to supplement their household income and support their families. Along with eBay, Mercari, Etsy, and others, we are working to fight the new 1099-K threshold and we ask you to join us by sending a letter to Congress and joining the 1099-K Fairness Coalition.