Shopify POS Users Selling on Amazon
Running a Shopify store with POS (Point of Sale) and expanding onto Amazon? You’re blending physical retail with one of the biggest eCommerce platforms but if your sales tracking, tax reporting, and inventory systems aren’t in sync, growth can quickly spiral into chaos.
In 2025, the IRS is laser-focused on multi-channel sellers, especially those using Shopify POS in-store and Amazon for online reach. This blog walks you through how to scale smart while staying compliant with U.S. tax laws.
IRS Tax Code References
- IRC §162 – Ordinary and necessary business expenses
- IRC §263A – Inventory capitalization and cost allocation rules
- IRC §6050W – 1099-K income reporting rules
- IRC §446 – Consistent accounting methods for hybrid retailers
- IRC §6001 – IRS recordkeeping and audit requirements
Relevant IRS Forms
- Form 1099-K – From both Shopify and Amazon, if thresholds are met
- Schedule C (Form 1040) – Business income reporting for sole proprietors
- Form 4562 – For depreciation on POS hardware or store upgrades
- Form 1040-ES – To pay estimated quarterly taxes
- Form 8829 – If claiming home office deductions (for online operations)
Example: Shopify POS Seller Expanding on Amazon
Example: Tanya owns a retail gift shop with Shopify POS. In 2024, she decided to list excess inventory on Amazon to increase reach. Her numbers:
- $180,000 in in-store sales (Shopify POS)
- $90,000 in online Amazon sales (fulfilled from her own stock)
- Spent $30,000 on restocking, $5,000 on Amazon fees, and $10,000 upgrading her POS system
Tanya:
- Reports gross income from both platforms
- Deduces Amazon fees and POS hardware under §162
- Capitalizes inventory under §263A
- Receives 1099-Ks from both platforms
- Reports income and deductions on Schedule C
Step-by-Step Guide to Scale and Stay IRS-Compliant in 2025
1. Separate Platform Reporting
Use apps like A2X, TaxJar, or ConnectBooks to track POS and Amazon income separately. This helps in 1099-K reconciliation and IRS reporting.
2. Standardize Inventory Systems
Integrate Shopify POS with Amazon listings through inventory sync tools like Zoho Inventory or Skubana. Avoid overreporting or missing COGS entries.
3. Track Fulfillment Sources
Clearly label whether orders were fulfilled via Amazon or from your store. This affects COGS and shipping expense classification.
4. Log Merchant Fees and Gateway Charges
Amazon FBA fees, Shopify Payments gateway charges, and POS merchant fees must be tracked individually to claim full deductions.
5. Use Consistent Accounting Methods
If you use accrual for in-store inventory, don’t switch to cash for Amazon without IRS approval. IRC §446 requires consistency.
6. Automate Sales Tax Reports
Shopify POS and Amazon may collect sales tax, but you must still file state sales tax returns. Automate this with software like Avalara or TaxJar.
7. Reconcile 1099-Ks Regularly
In 2025, both Shopify and Amazon will issue Form 1099-K for sellers earning $600+. Don’t rely solely on those reports keep your own books.
8. Claim Deductions Specific to Each Channel
POS hardware, Amazon seller software, inventory storage, in-store signage categorize these by platform for audit clarity.
9. Depreciate High-Cost Assets
Use Form 4562 for POS registers, display screens, barcode scanners, or packaging equipment costing $2,500+.
10. File Quarterly Estimated Taxes
High-volume sales on both platforms will trigger self-employment and income tax obligations. Use Form 1040-ES to avoid underpayment penalties.
Conclusion
Scaling from a local store to a national (or global) brand using Shopify POS and Amazon is powerful but it requires smart bookkeeping and tax planning. When income, inventory, and deductions are clearly separated and tracked, you stay audit-proof and profit-focused in 2025.
Don’t just sell more. Scale better.
Call to Action
Struggling to align your Shopify POS and Amazon books? Unsure how to report inventory and income split across two systems?
Book a private tax consultation with Anshul Goyal, CPA, EA, FCA
He’s helped dozens of Shopify POS sellers launch and scale on Amazon without tax confusion. In your session, you’ll cover:
- How to reconcile Shopify and Amazon 1099-Ks
- How to split inventory and COGS between POS and FBA
- When and how to capitalize expenses vs. deduct them
- What triggers IRS scrutiny for multi-channel retailers
- How to automate sales tax compliance in every state
Schedule your session now: https://calendly.com/anshulcpa/
Make 2025 the year you scale with confidence.
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.
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.
Top 5 High-Searched FAQs for 2025
1. Do I need separate accounts for Shopify POS and Amazon?
Yes. For proper reconciliation and reporting, keep income, expenses, and inventory separated.
2. Will I receive two 1099-Ks for POS and Amazon?
Yes, if you meet the $600 threshold on each. Both platforms will issue separate 1099-Ks in 2025.
3. How do I handle COGS across two platforms?
You must allocate inventory sold on each platform accurately. Use SKU tracking and integration tools.
4. Can I deduct POS hardware like card readers or scanners?
Yes, under IRC §162. Large purchases ($2,500+) should be depreciated via Form 4562.
5. What software is best for syncing Shopify and Amazon?
QuickBooks Commerce, A2X, and Skubana are great for syncing inventory, income, and tax reports across platforms.