Running an eBay business brings costs. But the good news is that deduction is possible for many of the surrounding expenses. Tax write-offs present assistance in lowering taxable income amount. The keystone of this practice is recording transactions in the scope of business and of course, reporting correctly.
eBay Seller Tax Write-Offs
These expenses must be both necessary and ordinary in order to leverage eBay seller tax deductions. Major categories that can be written off are outlined below:
1- eBay Fees
- Listing fees
- Final value fees
- Processing fees in terms of payment (eBay Payments, PayPal)
2- Shipping & Packaging Costs
- Postage (USPS, FedEx, UPS)
- Boxes, tape, labels as well as envelopes
- Tracking and insurance costs
3- Cost of Goods Sold (COGS)
- Wholesale inventory purchases
- Second-hand items purchased with resale focus
- Raw materials for handmade products
4- Home Office Deduction
- Rent or mortgage interest
- Utilities (electricity, internet, water)
- Office furniture and supplies
5- Business Software & Subscriptions
- Accounting software (QuickBooks)
- eBay Store subscriptions
- Inventory management tools
6- Advertising & Marketing
- eBay Promoted Listings fees
- Facebook, Instagram, Google ads
- Business website or branding materials
7- Vehicle Expenses
- Mileage for sourcing inventory
- Gas, maintenance and repairs
- Depreciation (if the vehicle is used primarily for business)
8- Internet & Phone Bill (the portion used for eBay business)
- Business phone plan
- Internet service
9- Business Travel & Meals (subject to IRS limits)
- Trade shows and sourcing trips
- Hotels, airfare, rental cars
- Meals during business-related travel
eBay Business Expenses on Taxes
eBay expenses are reported on Schedule C (Profit or Loss from Business). It should be recognized that the IRS allows deductions with only proper transactional records.
Final Thoughts
Business deduction claiming is the best method to reduce the taxation amount for eBay sellers. Tracking expense transactions as well as receipts and filing qualified deductions establishes full compliance with IRS rules and optimizes tax position.
