If you’re selling items on fetish marketplaces, understanding the tax side is just as important as making the sale itself. Many creators start out casually, but once income becomes consistent, it’s important to know how earnings may be reported and what responsibilities you might have as a seller. This is especially relevant for people who sell used panties or similar items online, where questions often come up about income reporting and legality — including whether is selling used panties illegal in the first place.
In this guide, we’ll break down what All Things Worn sellers should know about taxes, including how income from online marketplaces is typically treated, what records you should keep, and when tax forms may come into play. We’ll also cover practical tips to help sellers stay organized and avoid surprises when tax season arrives.
TL;DR:
Yes, in most cases you do need to pay taxes on your All Things Worn earnings. When you sell items on the platform, you're generating income, and tax authorities in virtually every country consider income taxable regardless of where it comes from or how you earned it.
Selling on All Things Worn counts as income because you're providing goods in exchange for payment. From a tax perspective, you're running a business or earning supplemental income that needs to be reported.
The distinction between hobby income and business income can affect how your taxes are calculated, though both are generally taxable. If you're selling occasionally with no profit motive, some tax systems might classify this as hobby income. However, if you're actively trying to make money, listing items regularly, or treating this as a business venture, it's almost certainly business or self-employment income.
All Things Worn operates differently from traditional employment where your employer withholds taxes and sends you tax forms at year-end. As an independent seller on the platform, you're responsible for your own tax compliance.
In the United States, payment processors and platforms may be required to issue Form 1099-K to sellers who meet certain thresholds. Following the passage of the One Big Beautiful Bill Act (OBBBA) in July 2025, the threshold has been returned to $20,000 in gross payments AND 200 or more transactions per year. If you receive a 1099-K, a copy also goes to the IRS, which means they have a record of your earnings.
However, even if All Things Worn or your payment processor doesn't issue you a tax form because you didn't meet the threshold, you're still legally required to report your income. The absence of a 1099-K doesn't mean your earnings are tax-free; it simply means you need to track and report them yourself.
This is where record-keeping becomes critical. Whether you earned $200 or $20,000, accurate records of your sales, fees, and net income ensure you can report correctly even without official tax forms from the platform.
For US-based sellers, All Things Worn income is typically classified as self-employment income, which means you're subject to both regular income tax and self-employment tax.
Self-employment tax covers Social Security and Medicare contributions that would normally be split between an employee and employer. Since you're working for yourself, you pay both portions, which comes to 15.3% of your net earnings (12.4% for Social Security and 2.9% for Medicare). This is in addition to regular federal income tax based on your tax bracket.
You must file a tax return if your net earnings from self-employment are $400 or more in a year. Net earnings means your gross income minus allowable business expenses. Even if your total income is below the standard filing threshold, the $400 self-employment rule applies separately.
Beyond federal taxes, most states also impose state income tax on self-employment earnings. State rates and rules vary significantly. Some states have no income tax at all (like Florida, Texas, and Washington), while others have progressive tax systems that could add another 3-10% or more to your tax burden.
UK sellers on All Things Worn need to report their earnings to HMRC (His Majesty's Revenue and Customs) as self-employment or trading income.
The UK has a trading allowance of £1,000 per tax year. If your gross income from All Things Worn and any other trading income is £1,000 or less, you don't need to report it or pay tax on it. However, if you earn more than £1,000, you must report all your self-employment income.
Once your income exceeds £1,000, you need to register with HMRC as self-employed. You should do this by October 5th following the end of the tax year in which you started earning (the UK tax year runs from April 6 to April 5). After registering, you'll file a Self Assessment tax return each year.
Your All Things Worn income is added to any other income you earn, and you pay income tax on the total based on UK tax bands. For the 2024-25 tax year, you have a personal allowance of £12,570 (the amount you can earn before paying any income tax), then pay 20% on income between £12,571 and £50,270, 40% on income between £50,271 and £125,140, and 45% on income over £125,140.
Regarding National Insurance contributions, the system changed significantly in April 2024. If your profits are above £12,570, you're automatically treated as having paid Class 2 National Insurance contributions and receive full access to contributory benefits (including State Pension) without actually having to pay Class 2 NICs. Those with profits between £6,725 and £12,570 receive National Insurance credits automatically. Only those with profits below £6,725 might choose to pay voluntary Class 2 contributions at £3.50 per week for 2025-26.
You'll also pay Class 4 National Insurance contributions on your profits: 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270.
Tax requirements for All Things Worn sellers vary by country across Europe, but the general principle remains the same: income earned needs to be reported and taxed according to local laws.
Most EU countries require you to declare income from online selling activities. Some countries have registration thresholds for VAT (Value Added Tax), while others require registration from your first sale. Income tax systems differ across the EU, with some countries using progressive tax brackets and others using flat tax rates.
Many EU countries also require social security or social insurance contributions on self-employment income. The rates and thresholds vary significantly between countries. For instance, Germany has a comprehensive social insurance system with contributions for health, pension, unemployment, and long-term care insurance. France requires self-employed individuals to pay social contributions that can represent a significant percentage of income.
Spain requires self-employed workers (autónomos) to register with Social Security and pay monthly contributions regardless of actual earnings, though there are reduced rates for new businesses. Italy has a similar system with mandatory social security contributions for self-employed individuals.
The key takeaway for European sellers is that you should research your specific country's tax laws or consult with a local tax professional who understands self-employment and online business income.
In Canada, income from All Things Worn is considered self-employment or business income. You report it on your T1 General tax return using Form T2125 (Statement of Business or Professional Activities). You can deduct eligible business expenses, and you're required to pay income tax on your net profit. If your revenue exceeds $30,000 in a single calendar quarter or over four consecutive quarters, you must register for and charge GST/HST (Goods and Services Tax/Harmonized Sales Tax).
Australian sellers report All Things Worn income as business income on their individual tax return. If you're operating as a business and your GST turnover is $75,000 or more, you need to register for GST. You'll pay income tax on your profits according to Australian tax brackets, and you may also need to make quarterly Pay As You Go (PAYG) installment payments if your income reaches certain levels.
One benefit of treating your All Things Worn activity as a business is the ability to deduct legitimate business expenses, which reduces your taxable income.
Common deductible expenses include packaging materials like mailers, tissue paper, boxes, and tape, shipping costs paid to carriers, platform fees charged by All Things Worn for listings or transactions, and equipment you use for your business such as a camera for product photos, a scale for weighing packages, or a printer for shipping labels.
Other potentially deductible expenses include marketing costs, office supplies, and even a portion of your home internet if you use it for business purposes. Some sellers also deduct mileage for trips to the post office or to purchase supplies.
The most important rule for deductions is keeping receipts and records. Tax authorities expect you to substantiate your expenses with documentation. Save receipts, invoices, bank statements, and any other proof of business expenditures.
Proper tracking of your All Things Worn income and expenses makes tax filing significantly easier and ensures you're claiming all eligible deductions while accurately reporting income.
Keep records of all your sales, noting the date, item sold, sale price, and any fees deducted by the platform. Track all fees paid to All Things Worn, payment processors, or any other service providers. Document every business expense with the date, amount, what was purchased, and how it relates to your business.
Many sellers use spreadsheets to track income and expenses, creating separate columns for different categories. Alternatively, accounting software designed for small businesses or self-employed individuals can automate much of the tracking and generate reports for tax time.
Failing to report your All Things Worn income carries real risks and consequences that can be far more expensive than simply paying your taxes properly.
Tax authorities in most countries have penalties for underreporting or failing to report income. In the US, the IRS can assess a failure-to-file penalty of 5% of unpaid taxes for each month you're late (up to 25%), plus a failure-to-pay penalty of 0.5% per month.
You'll also owe back taxes on the unreported income, plus interest that accrues from the date the taxes were originally due. Underreporting is particularly risky if All Things Worn or your payment processor issues tax forms to the government.
Set aside money for taxes regularly rather than spending all your earnings. A good rule of thumb is to save 25-30% of your net income for taxes. Keep separate accounts for your business if possible. File your taxes on time, even if you can't pay the full amount immediately.
Maintain organized records throughout the year rather than scrambling at tax time. Consider quarterly estimated tax payments if you're earning significant income. Finally, know when to consult a tax professional—if your All Things Worn income is substantial, you have complex deductions, or you're unsure about requirements, professional help is worth the investment.
Do I have to pay taxes if I only made a small amount?
Generally yes, though thresholds vary by country. In the US, you must file if you have $400 or more in net self-employment income. In the UK, the trading allowance is £1,000. Check your local requirements to be sure.
Does All Things Worn report income to tax authorities?
All Things Worn itself may not directly report, but payment processors often do when sellers meet certain thresholds. In the US, payment processors issue 1099-K forms when transactions exceed reporting thresholds. Regardless, you're responsible for reporting all income.
Can I deduct shipping costs?
Yes, shipping costs you pay to send items to buyers are deductible business expenses.
Do I need to register as self-employed?
This depends on your country and income level. In the UK, you must register with HMRC as self-employed once you exceed the £1,000 trading allowance. In the US, there's no separate registration for self-employment status itself. Check local requirements for your specific situation.
Is cash income taxable?
Yes, absolutely. Income is taxable regardless of payment method. All earnings must be reported.
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