Tax Deductions Checklist
Amazon FBA Seller Tax Deductions Checklist (2026)
2026 tax deduction checklist for self-employed Amazon FBA sellers. Claim write-offs on inventory costs, Amazon fees, shipping, software tools, and home office expenses.
Key Takeaways
- Download your Amazon annual tax report and monthly payment summaries in January. These reports break down every fee type, making it simple to categorize deductions on your Schedule C.
- If you import products from overseas, customs duties and import fees are part of your cost of goods sold. Include these in your per-unit cost calculation for accurate profit tracking.
- Keep your business and personal Amazon accounts completely separate. Mixing personal purchases with business inventory purchases creates a bookkeeping nightmare and raises red flags if audited.
As a self-employed Amazon FBA seller, your product inventory, Amazon fees, shipping costs, and sourcing expenses are all deductible. Whether you do retail arbitrage, wholesale, or private label, the IRS allows you to write off the costs of running your e-commerce business. This checklist covers every deduction available to Amazon FBA sellers in 2026.
Use this interactive checklist to review every deduction you might be eligible for. Check off items as you go to track your progress. Each deduction includes the Schedule C line where it belongs, plus a concrete example specific to your profession.
Your Deductions Checklist
Amazon Fees and Platform Costs
Amazon charges multiple fees that collectively represent one of your largest expense categories.
The percentage-based fee (typically 8-15%) Amazon charges on each sale, varying by category.
Example: $80,000 in annual sales at an average 15% referral fee = $12,000.
Per-unit fees Amazon charges for picking, packing, and shipping your products from their warehouses.
Example: 5,000 units sold at average $3.50 per unit = $17,500/year.
Amazon Professional Seller account subscription at $39.99/month.
Example: $39.99/month = $480/year.
Monthly inventory storage fees and long-term storage fees for products held in Amazon warehouses.
Example: Monthly storage fees averaging $200/month = $2,400/year.
Fees for having unsold or returned inventory shipped back to you or disposed of by Amazon.
Example: Removal orders totaling $300/year.
Inventory and Cost of Goods Sold
The cost of products you purchase to resell is your largest deduction, reported as cost of goods sold.
Wholesale products, retail arbitrage finds, and private label inventory purchased for resale.
Example: Monthly inventory purchases averaging $4,000 = $48,000/year.
Samples ordered from suppliers to evaluate quality before placing bulk orders.
Example: Product samples from 10 suppliers at $50 each = $500.
Poly bags, labels, bubble wrap, tape, and boxes used to prep inventory before shipping to Amazon.
Example: Poly bags ($30/month), labels ($20/month), and boxes ($40/month) = $1,080/year.
Shipping costs to send inventory from suppliers or your home to Amazon FBA warehouses.
Example: UPS/FedEx shipping to FBA averaging $300/month = $3,600/year.
Software and Research Tools
FBA sellers rely on paid tools for product research, repricing, and inventory management.
Jungle Scout, Helium 10, or Keepa subscriptions for finding profitable products and analyzing competition.
Example: Helium 10 at $79/month = $948/year.
Automated repricing tools like BQool or RepricerExpress to stay competitive on pricing.
Example: BQool at $25/month = $300/year.
Tools like InventoryLab, SoStocked, or RestockPro for tracking inventory and profitability.
Example: InventoryLab at $69/month = $828/year.
QuickBooks, Xero, or other bookkeeping software for tracking income, expenses, and inventory costs.
Example: QuickBooks at $30/month = $360/year.
ScoutIQ, Scoutly, or similar apps for scanning products during retail arbitrage sourcing trips.
Example: ScoutIQ at $14/month = $168/year.
Vehicle and Sourcing Travel
Miles driven to source products, visit suppliers, and ship inventory are deductible.
Business miles driven for retail arbitrage sourcing, supplier visits, and trips to ship inventory.
Example: 8,000 business miles at $0.70/mile = $5,600.
Oil changes, tires, and repairs if using the actual expense method instead of standard mileage.
Example: Annual vehicle expenses of $3,000 at 50% business use = $1,500.
Tolls and parking fees incurred during sourcing trips to retail stores and suppliers.
Example: Tolls and parking averaging $40/month = $480/year.
Flights, hotels, and rental cars for attending trade shows or visiting wholesale suppliers.
Example: Two trade show trips at $800 each = $1,600.
Home Office and Storage
Your home workspace for prepping inventory and managing your seller account is deductible.
Simplified ($5/sq ft up to 300 sq ft) or actual method for your dedicated workspace.
Example: 250 sq ft prep area at $5/sq ft = $1,250 (simplified).
Monthly rent for a storage unit used to hold inventory before shipping to Amazon.
Example: 10x10 storage unit at $100/month = $1,200/year.
Metal shelving, work tables, label printers, and scales for your inventory prep area.
Example: Shelving ($200), prep table ($150), and thermal label printer ($120) = $470.
Home internet used for managing your Amazon seller account, researching products, and monitoring sales.
Example: $80/month internet at 60% business use = $576/year.
Advertising and Product Launch
Amazon PPC campaigns and brand-building costs to drive sales and improve product visibility.
Sponsored Products, Sponsored Brands, and Sponsored Display ad campaigns within Amazon.
Example: Amazon PPC budget at $500/month = $6,000/year.
Professional product photos, infographic design, and A+ content creation for listings.
Example: Product photography ($200/product) for 5 new products = $1,000.
USPTO trademark filing fees and Amazon Brand Registry costs for protecting your private label brand.
Example: Trademark application ($350) and attorney fees ($500) = $850.
Google Ads, Facebook Ads, or influencer marketing to drive external traffic to your Amazon listings.
Example: Facebook ads at $200/month = $2,400/year.
Common Mistakes to Avoid
Reporting only Amazon deposits as income instead of gross sales.
Report your gross sales as revenue on Schedule C, then deduct Amazon fees separately. Your 1099-K from Amazon reflects gross sales, and the IRS expects your return to match.
Not tracking inventory costs properly for cost of goods sold (COGS).
Use InventoryLab or similar software to track the purchase cost of every unit. Accurate COGS is critical for calculating your true profit and deductions.
Forgetting to deduct Amazon storage fees, removal fees, and other smaller platform charges.
Download your Amazon Fee Preview report or use your monthly statements to capture all fee categories. Storage, removal, and disposal fees add up to hundreds of dollars.
Not logging mileage for retail arbitrage sourcing trips.
Every trip to a store for product sourcing is deductible business mileage. Use a mileage tracking app and note the store name and purpose of each trip.
Deducting the full cost of inventory purchased but not yet sold by year-end.
Only the cost of inventory that was actually sold during the year is deductible as COGS. Unsold inventory at year-end is carried forward as an asset, not a current-year expense.
Quick Reference: Deductions at a Glance
| Expense | Schedule C Category |
|---|---|
| Amazon referral fees | Amazon Fees and Platform Costs (Line 27a - Other Expenses) |
| FBA fulfillment fees | Amazon Fees and Platform Costs (Line 27a - Other Expenses) |
| Monthly subscription fee | Amazon Fees and Platform Costs (Line 27a - Other Expenses) |
| FBA storage fees | Amazon Fees and Platform Costs (Line 27a - Other Expenses) |
| Removal and disposal fees | Amazon Fees and Platform Costs (Line 27a - Other Expenses) |
| Product inventory purchases | Inventory and Cost of Goods Sold (Line 22 - Supplies) |
| Product samples and testing | Inventory and Cost of Goods Sold (Line 22 - Supplies) |
| Prep and packaging supplies | Inventory and Cost of Goods Sold (Line 22 - Supplies) |
| Freight and inbound shipping | Inventory and Cost of Goods Sold (Line 22 - Supplies) |
| Product research tools | Software and Research Tools (Line 27a - Other Expenses) |
| Repricing software | Software and Research Tools (Line 27a - Other Expenses) |
| Inventory management software | Software and Research Tools (Line 27a - Other Expenses) |
| Accounting software | Software and Research Tools (Line 27a - Other Expenses) |
| Scanning apps and sourcing subscriptions | Software and Research Tools (Line 27a - Other Expenses) |
| Standard mileage deduction* | Vehicle and Sourcing Travel (Line 9 - Car and Truck Expenses) |
| Vehicle maintenance (actual method)* | Vehicle and Sourcing Travel (Line 9 - Car and Truck Expenses) |
| Tolls and parking for sourcing | Vehicle and Sourcing Travel (Line 9 - Car and Truck Expenses) |
| Travel for trade shows and supplier visits | Vehicle and Sourcing Travel (Line 9 - Car and Truck Expenses) |
| Home office deduction* | Home Office and Storage (Line 30 - Business Use of Home) |
| Off-site storage unit | Home Office and Storage (Line 30 - Business Use of Home) |
| Shelving and prep station | Home Office and Storage (Line 30 - Business Use of Home) |
| Internet service (business portion)* | Home Office and Storage (Line 30 - Business Use of Home) |
| Amazon PPC advertising | Advertising and Product Launch (Line 8 - Advertising) |
| Product photography and design | Advertising and Product Launch (Line 8 - Advertising) |
| Brand registry and trademark | Advertising and Product Launch (Line 8 - Advertising) |
| External traffic campaigns | Advertising and Product Launch (Line 8 - Advertising) |
* = business-use percentage only (partial deduction)
The Bottom Line
Amazon FBA sellers face a complex web of platform fees, inventory costs, and software expenses that are all deductible. The biggest mistake is underreporting deductions by only looking at net deposits rather than tracking each fee category. Use Amazon's detailed reports and dedicated bookkeeping software to capture every dollar of deductions your business generates.
If you want to get your bank and credit card transactions sorted into the right Schedule C categories without building a spreadsheet, that is what Categorize My Expenses does. Upload your statements, review the AI-suggested categories, and get an organized report for your tax filing.
Disclaimer: This checklist is for educational purposes only and does not constitute tax, legal, or financial advice. Tax rules change, and individual situations vary. Consult a qualified tax professional for advice specific to your situation. Categorize My Expenses is a financial data organization tool. It is not a tax preparer and does not provide tax advice.
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