Tax Deductions Checklist
Online Reseller Tax Deductions Checklist (2026)
2026 tax deduction checklist for self-employed online resellers. Claim write-offs on inventory costs, shipping supplies, platform fees, mileage, and home office expenses.
Key Takeaways
- Photograph every thrift store and garage sale receipt, even faded or handwritten ones. If receipts are unavailable, take a photo of the item with the price tag before purchasing. This documentation supports your COGS deductions.
- Use inventory management software or even a simple spreadsheet to track each item: date purchased, source, cost, platform listed, sale price, and fees. This makes calculating COGS and profit by item straightforward at tax time.
- If you sell on multiple platforms, consolidate all sales data into one accounting system. QuickBooks or Wave can sync with many platforms, saving hours of manual data entry and ensuring you capture every fee and expense.
As a self-employed online reseller, your inventory purchases, shipping costs, platform fees, and sourcing mileage are all deductible business expenses. Whether you flip thrift store finds, clearance deals, or garage sale treasures, the IRS allows you to deduct the costs that go into building your reselling business. This checklist covers every deduction available to online resellers 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
Inventory and Cost of Goods Sold
The cost of items you purchase for resale is your largest deduction, reported as cost of goods sold.
Items bought at thrift stores, garage sales, estate sales, clearance racks, liquidation lots, and wholesale.
Example: Monthly sourcing budget of $1,500 = $18,000/year.
Bulk lots purchased from liquidation companies, overstock dealers, or wholesale suppliers.
Example: Four liquidation pallets at $500 each = $2,000.
Fees for authenticating luxury goods or grading collectibles (sneakers, cards, electronics).
Example: Authentication fees on 20 items at $15 each = $300.
Stain removers, steamers, shoe cleaning kits, and repair materials to prepare items for resale.
Example: Steamer ($40), stain remover ($30/year), and shoe cleaner ($25) = $95.
Platform Fees and Selling Costs
Online marketplace fees are a major expense for resellers and are fully deductible.
eBay final value fees (typically 13.25%), promoted listing fees, and store subscription costs.
Example: $40,000 in eBay sales at 13.25% = $5,300 in fees, plus store subscription ($22/month) = $5,564.
Poshmark's 20% commission on sales over $15 (or flat $2.95 for sales under $15).
Example: $15,000 in Poshmark sales at 20% commission = $3,000.
Selling fees on Mercari (10%), Facebook Marketplace, and other platforms.
Example: $5,000 in Mercari sales at 10% = $500.
PayPal, Stripe, or platform-specific payment processing charges on sales.
Example: PayPal processing on $10,000 in payments at 2.9% + $0.30 = $390.
List Perfectly, Vendoo, or Crosslist subscriptions for managing listings across multiple platforms.
Example: List Perfectly at $29/month = $348/year.
Shipping and Packaging Supplies
Everything you need to pack and ship sold items to buyers.
USPS, UPS, FedEx, and Pirate Ship postage for shipping orders to buyers.
Example: Average $6 shipping per sale on 2,000 orders = $12,000/year.
Cardboard boxes, poly mailers, padded envelopes, and specialty mailers.
Example: Poly mailers ($50/month) and boxes ($30/month) = $960/year.
Bubble wrap, tissue paper, packing paper, and tape for protecting shipped items.
Example: Bubble wrap ($20/month) and tape ($10/month) = $360/year.
Postal scale, thermal label printer, and tape dispenser for efficient shipping.
Example: Thermal label printer ($100) and postal scale ($25) = $125.
Vehicle and Sourcing Travel
Miles driven to thrift stores, garage sales, estate sales, and the post office are all deductible.
Business miles for sourcing trips to thrift stores, garage sales, estate sales, and post office runs.
Example: 10,000 business miles at $0.70/mile = $7,000.
Tolls and parking fees during sourcing trips and post office visits.
Example: Parking and tolls totaling $250/year.
Gas, maintenance, insurance, and depreciation if using the actual expense method.
Example: Annual vehicle costs of $5,000 at 60% business use = $3,000.
Overnight travel to out-of-town estate sales, auctions, or flea markets.
Example: Two overnight sourcing trips with hotel ($100/night) and meals = $400.
Home Office and Storage
Your inventory storage area, photo studio, and shipping station can all qualify for the home office deduction.
Simplified ($5/sq ft up to 300 sq ft) or actual method for dedicated workspace.
Example: 300 sq ft inventory room at $5/sq ft = $1,500 (simplified).
Storage unit for holding overflow inventory that does not fit in your home workspace.
Example: Storage unit at $85/month = $1,020/year.
Lightbox, mannequin, hangers, backdrop, and lighting for product photography.
Example: Mannequin ($80), lightbox ($60), and backdrop ($30) = $170.
Shelving units, bins, garment racks, and storage containers for organizing inventory.
Example: Garment rack ($40), shelving ($150), and bins ($60) = $250.
Common Mistakes to Avoid
Not keeping receipts for items purchased at thrift stores, garage sales, and flea markets.
When no receipt is available, record the date, location, item purchased, and amount paid in a notebook or app immediately after each purchase. Photos of price tags also help.
Reporting platform deposits as income instead of gross sales.
Report your total gross sales as revenue on Schedule C, then deduct platform fees, shipping costs, and other expenses separately. Your 1099-K reflects gross transaction amounts.
Forgetting to deduct mileage for frequent short trips to thrift stores and the post office.
Use a mileage tracking app that runs automatically. Resellers often drive 8,000-15,000 business miles per year, worth $5,600 to $10,500 at the standard mileage rate.
Deducting the full cost of all inventory purchased rather than just inventory sold (COGS).
Only inventory that was sold during the tax year counts as cost of goods sold. Unsold inventory sitting in your closet is an asset carried to the next year, not a current-year deduction.
Not tracking platform fees across multiple selling channels.
If you sell on eBay, Poshmark, Mercari, and Facebook Marketplace, download annual fee summaries from each platform. Fees across all channels can total thousands of dollars.
Quick Reference: Deductions at a Glance
| Expense | Schedule C Category |
|---|---|
| Inventory purchases | Inventory and Cost of Goods Sold (Line 22 - Supplies) |
| Liquidation and wholesale lots | Inventory and Cost of Goods Sold (Line 22 - Supplies) |
| Authentication and grading services | Inventory and Cost of Goods Sold (Line 22 - Supplies) |
| Cleaning and repair supplies | Inventory and Cost of Goods Sold (Line 22 - Supplies) |
| eBay fees | Platform Fees and Selling Costs (Line 27a - Other Expenses) |
| Poshmark fees | Platform Fees and Selling Costs (Line 27a - Other Expenses) |
| Mercari and other platform fees | Platform Fees and Selling Costs (Line 27a - Other Expenses) |
| Payment processing fees | Platform Fees and Selling Costs (Line 27a - Other Expenses) |
| Cross-listing software | Platform Fees and Selling Costs (Line 27a - Other Expenses) |
| Postage and shipping costs | Shipping and Packaging Supplies (Line 22 - Supplies) |
| Boxes and mailers | Shipping and Packaging Supplies (Line 22 - Supplies) |
| Packing materials | Shipping and Packaging Supplies (Line 22 - Supplies) |
| Shipping equipment | Shipping and Packaging Supplies (Line 22 - Supplies) |
| Standard mileage deduction* | Vehicle and Sourcing Travel (Line 9 - Car and Truck Expenses) |
| Tolls and parking | Vehicle and Sourcing Travel (Line 9 - Car and Truck Expenses) |
| Vehicle actual expenses* | Vehicle and Sourcing Travel (Line 9 - Car and Truck Expenses) |
| Travel for sourcing events | 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) |
| Photography setup | Home Office and Storage (Line 30 - Business Use of Home) |
| Shelving and organization | Home Office and Storage (Line 30 - Business Use of Home) |
* = business-use percentage only (partial deduction)
The Bottom Line
Online resellers can deduct inventory costs, platform fees, shipping expenses, vehicle mileage, and workspace costs. The most commonly overlooked deductions are sourcing mileage and platform fees across multiple selling channels. Meticulous record-keeping of every purchase and sale is the foundation of maximizing your deductions and staying audit-ready.
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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