Introduction
Running a high-volume store across eBay and Shopify requires more than just managing orders and listings it demands accurate bookkeeping, IRS-compliant records, and proper reporting across both platforms. In 2025, IRS scrutiny on e-commerce sellers is increasing, especially for those scaling across multiple sales channels.
This guide gives you a complete compliance framework to help you scale, report correctly, and protect your business.
Relevant Tax Codes for Multi-Platform Sellers
- IRC § 61(a): All income from any source, including platforms like eBay and Shopify, is taxable
- IRC § 1402: Self-employment income is subject to SE tax
- IRC § 162(a): Deduct ordinary and necessary business expenses
- IRC § 6001: Requires maintaining financial records
- IRC § 6050W: Requires third-party platforms (like Shopify Payments or PayPal) to issue 1099-Ks
Key IRS Forms for eBay-Shopify Sellers
- Schedule C (Form 1040): For reporting income and expenses
- Schedule SE (Form 1040): For self-employment tax
- Form 1099-K: Issued if you receive over $600 in payments via Shopify or PayPal
- Form 1040-ES: For quarterly estimated tax payments
- Form 4562: For depreciation on equipment used in your business
- Form 8829: For claiming home office deductions if eligible
Real-World Example: Syncing eBay and Shopify at Scale
Seller: Daniel sells home fitness gear through both eBay and Shopify.
- Total 2025 Revenue: $225,000
- eBay: $140,000
- Shopify: $85,000
- Inventory Costs: $90,000
- Fulfillment, Shipping & Returns: $20,000
- Marketing and Tools: $12,000
- Office and Utilities: $5,000
- Net Profit: $98,000
Tax Compliance Strategy:
Daniel tracks both eBay and Shopify sales separately, but consolidates totals monthly in QuickBooks. He issues monthly financial reports, deducts eligible expenses under IRC § 162(a), and makes estimated tax payments based on real-time income forecasts. He uses Form 4562 for depreciation on packaging and shipping equipment and Form 8829 for his home-based fulfillment center.
Step-by-Step IRS Compliance Checklist
Track Gross Sales by Platform
- Export monthly reports from both Shopify and eBay
- Avoid duplicate income reporting
- Combine for accurate Schedule C reporting
Maintain Expense Categories
- Keep receipts for inventory, fees, advertising, shipping, software, and outsourced labor
- Deduct under IRC § 162(a)
Track Cost of Goods Sold (COGS) Accurately
- Choose consistent valuation method (usually FIFO or cost method) under IRC § 471
- Record supplier name, product cost, purchase date, and quantity
Pay Estimated Taxes Quarterly
- Use Form 1040-ES
- Avoid penalties under IRC § 6654
File Correct IRS Forms
- Report income via Schedule C
- Pay self-employment tax using Schedule SE
- Use Form 4562 for capital equipment and Form 8829 for home office
Use Digital Bookkeeping Tools
- Integrate QuickBooks, Xero, or a Shopify accounting app
- Back up reports and invoices under IRC § 6001
Review Annual Reports and File On Time
- Check Form 1099-Ks from both platforms
- Reconcile against internal sales data
Conclusion
Managing high-volume sales across eBay and Shopify is powerful but risky if your finances aren’t in order. Following a structured, IRS-compliant approach ensures you grow profitably without surprises. With the right setup, multi-platform selling can scale your brand and reduce your tax stress.
Call to Action
Selling on Shopify and eBay? Need help managing the tax side of your multi-platform business?
Schedule a meeting with Anshul Goyal, CPA EA FCA, a U.S.-licensed Certified Public Accountant, Enrolled Agent admitted to practice before the IRS, and a cross-border tax expert. He helps American businesses and Indians in the U.S. stay compliant and grow their e-commerce operations confidently.
- Schedule a meeting: https://calendly.com/anshulcpa/
- Email: anshul@kkca.io
- Website: www.kkca.io
About Our CPA
Anshul Goyal, CPA EA FCA is a U.S. Certified Public Accountant, IRS-authorized Enrolled Agent, and international tax expert. With over 15 years of experience and $200M in tax savings for 2,000+ clients, Anshul leads e-commerce sellers in compliance, audit defense, and business scaling.
Disclaimer
This blog is for informational purposes only and should not be considered tax, legal, or accounting advice. Please consult a licensed professional for advice specific to your situation.
FAQs (Top 5 High-Searched Questions)
1. Do I report Shopify and eBay income separately on my tax return?
No. You combine income from both platforms on Schedule C but should track each source for bookkeeping purposes.
2. Will I get two 1099-Ks for Shopify and eBay sales?
Yes, if you cross the $600 threshold per platform. Reconcile both before filing.
3. Can I deduct Shopify and eBay fees?
Yes. These are ordinary business expenses deductible under IRC § 162(a).
4. Do I need to make estimated tax payments?
Yes, if you expect to owe more than $1,000. Use Form 1040-ES to avoid penalties.
5. What’s the best tool to manage finances across both platforms?
Use cloud-based systems like QuickBooks Online or Xero that sync with both eBay and Shopify.