Introduction
Many Shopify POS (Point of Sale) users run successful in-person retail businesses. But in 2025, more local brands are expanding to Amazon to capture nationwide audiences. If you’re a Shopify POS seller thinking of selling on Amazon, your next steps aren’t just operational—they’re also tax-driven.
This blog outlines how to successfully launch your products on Amazon, while aligning with IRS compliance requirements from day one.
Key IRS Tax Codes for Multi-Channel Expansion
- IRC § 61(a): All income—online or in-person—is taxable
- IRC § 162(a): Deductible business expenses include Amazon fees, packaging, and promotional costs
- IRC § 263A: Inventory and production costs may need capitalization
- IRC § 6001: Accurate recordkeeping required for all revenue streams
- IRC § 1402: Self-employment income must be reported and taxed
IRS Forms Required for Shopify POS and Amazon Sellers
- Schedule C (Form 1040): To report all business income and expenses
- Schedule SE (Form 1040): To calculate and report self-employment tax
- Form 1099-K: Issued by Amazon Payments and Shopify Payments if annual gross exceeds $600
- Form 1040-ES: For estimated tax payments
- Form 4562: To depreciate new equipment for packaging or selling Schedule a Meeting
Example: From Local Storefront to Amazon Seller
Seller: Luis owns a local skincare shop using Shopify POS. In 2025, he starts selling the same products on Amazon.
- Shopify POS Sales: $90,000
- Amazon Sales (first year): $60,000
- Inventory Costs: $50,000
- Shipping and Amazon Fees: $15,000
- Marketing: $10,000
- Packaging Equipment: $3,000
- Net Profit: $72,000
Tax Compliance Strategy:
Luis continues reporting both Shopify POS and Amazon income on a single Schedule C. He tracks each channel separately using accounting software and reconciles both against his Form 1099-Ks. Equipment purchases are depreciated with Form 4562. Estimated taxes are calculated and paid quarterly using Form 1040-ES.
Step-by-Step Guide to Launching on Amazon (with Tax Planning)
- Register for an Amazon Seller Central Account
- Use a business email and EIN, if available
- Choose the correct tax classification and connect to your business bank account
- Reconcile Shopify POS and Amazon Sales Separately
- Keep track of revenue from each channel
- Use accounting software like QuickBooks or Xero for clarity
- Track Inventory by Channel
- Don’t mix retail POS stock with Amazon stock without tracking movement
- Capitalize production costs where required under IRC § 263A
- Deduct New Amazon-Related Expenses
- Amazon seller fees, FBA prep, packaging materials, and subscriptions are deductible under IRC § 162(a)
- Maintain Clean Financial Records
- Retain all receipts, shipping records, invoices, and ad reports
- Comply with IRC § 6001 for audit protection
- Report All Income and Expenses on Schedule C
- Combine gross receipts but segment internally for accuracy
- Add depreciation claims using Form 4562 if equipment was purchased
- Pay Estimated Taxes Based on Combined Revenue
- File quarterly with Form 1040-ES to avoid underpayment penalties
Conclusion
Expanding your Shopify POS business to Amazon is a smart growth move—but only if your tax setup evolves with your strategy. From tracking inventory to claiming deductions, tax compliance should be part of your business expansion checklist in 2025.
Call to Action
Thinking of expanding from Shopify POS to Amazon?
Schedule a meeting with Anshul Goyal, CPA EA FCA, a U.S.-licensed Certified Public Accountant, IRS-authorized Enrolled Agent, and cross-border tax expert. He helps retail sellers grow into national e-commerce brands—while staying 100% IRS-compliant.
- 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 and Enrolled Agent with over 15 years of experience helping business owners transition into e-commerce. He has worked with more than 2,000 clients and saved over $200 million in taxes across various industries, including retail and online sales.
Disclaimer
This content is for informational purposes only. It does not constitute legal, accounting, or tax advice. Please consult a licensed professional for advice tailored to your situation.
FAQs (Top 5 High-Searched Questions)
1. Can I sell on Amazon if I already use Shopify POS?
Yes. Many retail businesses expand to Amazon. Just be sure to track sales and inventory separately.
2. Do I report Shopify POS and Amazon sales separately on taxes?
You combine them on Schedule C, but keep internal records by channel for clarity and reconciliation.
3. Are Amazon fees deductible?
Yes. All selling-related fees and subscriptions are deductible under IRC § 162(a).
4. How do I handle estimated tax payments with multiple income streams?
Combine income from all sources and make quarterly payments using Form 1040-ES.
5. Can I depreciate equipment used in both my physical store and Amazon business?
Yes, if the equipment is used for business purposes. Use Form 4562 to claim depreciation.