Platform fees, shipping costs, inventory, photography — every deduction Etsy, Amazon, and eBay sellers need to keep more of their profits.
Online selling has a rich set of deductions tied to inventory, shipping, and platform costs. Here are the top ones.
The cost of products you purchase to resell. This is usually the largest deduction for product sellers.
Etsy listing fees, Amazon referral fees, eBay final value fees, PayPal/Stripe transaction fees — all deductible.
Postage, boxes, bubble wrap, tape, and packing supplies. Also the cost of a postal scale and label printer.
If you use a dedicated space for inventory storage, packing, and business management — deduct that % of rent.
Camera, lightbox, backdrops, and any equipment used to photograph products for listings.
Etsy Ads, Amazon Sponsored Products, social media ads — all deductible marketing expenses.
67¢/mile to the post office, supply stores, or thrift stores for sourcing inventory.
Seller tools, inventory management software, Canva for graphics, email marketing tools.
The cost of refunded orders reduces your gross revenue — track every one.
Bookkeeping software, CPA fees, and any professional services for your selling business.
Cost of Goods Sold must be calculated as: Beginning Inventory + Purchases − Ending Inventory. Not tracking this means over-reporting income.
In 2026, platforms must send a 1099-K if you receive $600+. You owe taxes on all income regardless of whether you receive a 1099.
If you store inventory at home in a dedicated space, that qualifies as a home office deduction — even without a desk.
Daily trips to mail packages add up. At 67¢/mile, 5 miles/day × 250 days = $838 deduction.
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Yes. All selling income is taxable. Platforms send a 1099-K if you receive $600+, but you owe taxes on all income, even if no 1099 is issued.
COGS is the cost of the products you sell. Formula: Beginning inventory + purchases during the year − ending inventory = COGS. This reduces your taxable income directly.
Yes, if you use a dedicated space for inventory storage, packaging, or business management. Even a small storage room qualifies.
If you sell regularly and intend to make a profit, it is a business. Hobby income is taxable but expenses cannot be deducted. Operating as a business allows full deductions.
Estimate 25–30% of net profit each quarter and pay via IRS Direct Pay. Deadlines: Apr 15, Jun 16, Sep 15, Jan 15.
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