Do I owe taxes on all Amazon sales revenue?

No — you owe taxes on net profit, not gross revenue. Subtract your cost of goods sold, Amazon fees, shipping, software, and other business expenses from gross revenue to get taxable income.

Can I deduct inventory I bought but haven't sold?

No — unsold inventory is a business asset, not a current expense. Only the cost of inventory you actually sold during the year is deductible as cost of goods sold.

Are Amazon FBA storage fees deductible?

Yes — monthly storage fees, long-term storage fees, and all FBA service fees charged by Amazon are deductible selling costs.

Do I need to collect sales tax on Amazon sales?

Amazon collects and remits sales tax on your behalf in most states through its Marketplace Facilitator laws. Check your Amazon Tax Document Library — you typically don't need to remit separately for states where Amazon handles it.

Schedule C · Self-Employed

Tax Write-Offs for Amazon FBA Sellers

Amazon FBA sellers and third-party marketplace sellers are running a business and file on Schedule C. FBA fees, inventory costs, shipping, and software tools are all deductible — and with proper tracking, most active sellers save $3,000–$6,000 annually in taxes.

Avg. annual savings$3,900

Track My Amazon Seller Write-Offs — $14/mo

Top 6 Tax Write-Offs for Amazon FBA Sellers

Inventory & Cost of Goods Sold

100% deductible

The purchase price of inventory sold during the year is your largest deduction. Track purchases by SKU, calculate what actually sold, and deduct that cost. Unsold inventory is an asset, not a current-year expense.

Schedule C, Line 38

Amazon FBA & Seller Fees

100% deductible

FBA fulfillment fees, Amazon referral fees (typically 8–15% of each sale), monthly Professional Selling Plan fee ($39.99/mo), storage fees, and any Amazon Ads spend are all deductible selling costs.

Schedule C, Line 10

Shipping & Inbound Freight

100% deductible

Cost to ship inventory to Amazon fulfillment centers, return shipping, and any freight or logistics costs associated with moving product.

Schedule C, Line 27a

Software & Tools

100% deductible

Helium 10, Jungle Scout, Seller Board, or any Amazon selling, keyword research, or inventory management software subscriptions.

Schedule C, Line 18

Home Office

100% deductible

If you manage your Amazon business from a dedicated space at home, the home office deduction applies to that portion of your housing costs.

Schedule C, Line 30

Product Photography & Branding

100% deductible

Professional product photos, graphic design for listing images, brand trademark registration, and packaging design costs are deductible marketing and branding expenses.

Schedule C, Line 8

Common Mistakes to Avoid

Treating all Amazon gross revenue as income — you owe taxes on net profit (after COGS and fees), not gross sales.
Not separating COGS from other expenses — track inventory costs precisely for accurate tax reporting.
Forgetting Amazon Ads spend — download your campaign reports to get the exact annual total.
Missing storage fee deductions — Amazon's long-term storage fees are real expenses that reduce your profit.

Recordkeeping Tips

Download your Amazon Settlement Reports — they detail gross sales, fees, and refunds by period.
Use inventory management software to track COGS accurately by SKU.
Save all supplier invoices showing what you paid for inventory.
Track Amazon Ads spend in your advertising console and download annual summaries.

Frequently Asked Questions

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This content is for informational purposes only and does not constitute tax advice. Consult a qualified CPA or tax professional for guidance specific to your situation.