The 1099-NEC for resellers, plain English.

If you sold more than $600 through a buying group last year, you're getting a form. Here's how to read it, file it, and keep the IRS bored.

What the 1099-NEC actually is

1099-NEC = 'Non-Employee Compensation.' Any buying group that paid you more than $600 in commission or gross-up payments during the year must issue one by January 31 of the following year. It reports gross payments — not net profit.

Gross vs net: the trap

The 1099 shows the full number the group paid you. If they reimbursed your $94,000 buy and paid $4,900 in commission, the 1099 says $98,900. That is not your taxable income. Your taxable income is commission minus allowable business expenses. The cost basis of the inventory is deducted on Schedule C, not magically excluded from the 1099.

What to keep, all year

Every retailer receipt. Digital is fine; OCR tools like Dext or Hubdoc will index them for you.
Every shipping label / postage receipt.
Mileage if you drive to stores. Use MileIQ or similar.
Credit card statements. These are your backup when a receipt is lost.
Home office square footage if you have a dedicated workspace.

Quarterly estimated taxes

If this is your first profitable year, you'll want to set aside roughly 25–30% of your net commission for federal + self-employment tax. Pay it quarterly (April, June, September, January) to avoid an underpayment penalty. The IRS 'Direct Pay' tool makes this a 2-minute task.