High-Volume eBay Sellers on Amazon
If you’re running an eBay store but fulfilling orders via Amazon FBA or storing inventory in Amazon warehouses, you’re what we call a multi-platform power seller. But with high volumes come high risks especially with IRS audits, 1099-K matching, and inventory misreporting.
In 2025, the IRS is tightening its grip on eCommerce sellers, especially those crossing platforms. This blog breaks down essential bookkeeping strategies every eBay seller operating through Amazon must follow to stay profitable and compliant.
IRS Tax Code References
- IRC §162 – Business expenses (shipping, software, ads)
- IRC §263A – Inventory cost capitalization rules
- IRC §6050W – Payment reporting (e.g., Amazon & eBay 1099-Ks)
- IRC §446 – Accrual vs. cash accounting methods
- IRC §6001 – Recordkeeping responsibilities for businesses
Relevant IRS Forms
- Schedule C (Form 1040) – Sole proprietorship income
- Form 1099-K – One from eBay and one from Amazon, if thresholds are met
- Form 4562 – Depreciation on equipment, laptops, or inventory scanners
- Form 1040-ES – Estimated quarterly tax payments
- Form 8829 – Home office deduction (if applicable)
Example: eBay Seller Using Amazon FBA
Case Study: Rajesh runs an eBay store but uses Amazon for inventory storage and fulfillment.
In 2024, he:
- Sold $300,000 via eBay (received a 1099-K)
- Used Amazon FBA for 80% of shipments
- Paid $50,000 in Amazon logistics, storage, and referral fees
- Spent $90,000 on inventory and $15,000 on eBay ads
Rajesh:
- Files Schedule C, deducts inventory under §263A
- Depreciates his warehouse tools using Form 4562
- Tracks fulfillment fees as operational expenses under §162
- Claims a home office deduction with Form 8829
Step-by-Step Bookkeeping Guide for 2025
1. Use Separate Accounting Software
Connect both Amazon and eBay to a centralized accounting system like QuickBooks Commerce, A2X, or Link My Books. Avoid manual errors.
2. Reconcile 1099-Ks Monthly
Amazon and eBay may each send you Form 1099-K. Track gross receipts and compare them to your sales ledger monthly to catch discrepancies.
3. Categorize Platform Fees
List Amazon storage, shipping, and referral fees separately from eBay seller fees. Keep platform-specific ledgers.
4. Track Inventory Movement Accurately
Use SKU-level tracking. Monitor cost per item, returns, and shrinkage across both platforms. This is required for COGS calculations under §263A.
5. Log All Returns and Refunds
If customers return via Amazon but originally bought on eBay, adjust inventory and income reports accordingly to prevent overreporting.
6. Automate Sales Tax Collection & Reporting
Though Amazon and eBay collect marketplace sales tax in most states, you must still report these collections properly. Use software like TaxJar or Avalara.
7. Separate Business Expenses by Platform
Advertising costs, shipping labels, and sponsored listings should be tracked distinctly for eBay and Amazon.
8. Save Digital Receipts & Invoices
Cloud-stored proof of advertising, packaging, and logistics is critical if audited under IRC §6001.
9. Run Monthly P&L Statements
Break down profits by platform. This helps you forecast taxes and understand which sales channel is most profitable.
10. Prepare for Quarterly Taxes
With high volume, you’ll likely owe significant taxes. Use Form 1040-ES and set aside 30-35% of your net income for federal and state taxes.
Conclusion
Multi-platform selling sounds like a growth hack until it turns into a tax trap. For high-volume eBay sellers using Amazon FBA, clean books are your defense against IRS audits and margin loss. The key is syncing your platforms, categorizing expenses, and staying organized.
Get your bookkeeping right, and you won’t just survive tax season you’ll own it.
Call to Action
Managing two platforms is hard enough don’t let tax compliance make it worse.
If you’re unsure how to reconcile your eBay and Amazon sales, track inventory, or report fees, now is the time to get help.
Book a 1-on-1 session with Anshul Goyal, CPA, EA, FCA
A U.S. tax expert for online sellers, Anshul will walk you through how to:
- Sync your Amazon + eBay books
- Reconcile 1099-Ks
- Automate tax calculations
- Claim deductions unique to dual-platform sellers
- Avoid IRS audit triggers
Book now: https://calendly.com/anshulcpa/
Let’s make 2025 your most profitable year yet without the tax stress.
About Our CPA
Anshul Goyal, CPA, EA, FCA
Anshul brings 15+ years of U.S. and international tax experience. He specializes in helping online sellers, foreign founders, and U.S. residents with IRS and multi-state compliance. Known for his deep knowledge in Shopify and Amazon seller tax strategy, Anshul has helped hundreds of entrepreneurs minimize taxes and scale legally.
Disclaimer
This blog is for informational purposes only and does not constitute legal or tax advice. Please consult a qualified tax professional regarding your individual tax situation.
Top 5 High-Searched FAQs for 2025
1. Can I deduct Amazon fees if I sell only on eBay?
Yes, if you’re using Amazon for fulfillment or storage, those are valid business expenses.
2. Do I get two 1099-Ks one from eBay and one from Amazon?
Yes, if you meet the $600 threshold from each platform in 2025, both will issue 1099-Ks.
3. How do I account for returned products fulfilled by Amazon?
Track returns as negative income and adjust your inventory records accordingly.
4. Should I use cash or accrual method for inventory?
Accrual is generally preferred for inventory-heavy businesses under IRC §446.
5. What triggers an IRS audit for eCommerce sellers?
High sales volume, inconsistent 1099-K reporting, and failure to report platform-specific income.