31 Tax Write-Offs for Online Sellers

NAICS business code455000
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Whoever would have imagined just a few decades ago that people could run their own store from the comfort of home? Yup, it sure is a wonderful world of e-commerce out there. So why are so many online sellers overpaying on their taxes? Luckily, you can avoid this trap, simply by claiming the everyday business purchases you make all the time.

It doesn't matter if you're selling on eBay, TikTok shop, Etsy, Depop, or your own Shopify setup; these tax write-offs apply to you whether you're selling your own handmade goods or sourcing the best items from your local thrift stores. Weโ€™ve made it even easier, by compiling a list of the best write-offs for online sellers in one place. Itโ€™s like applying an automatic coupon at checkout!

Ecommerce platforms

Deduct what you pay for ecommerce programs like Shopify and WooCommerce.

Where to write it off: Schedule C, Box 18
Packaging & shipping

Bubble mailers, boxes, tissue paper and more: anything you buy to ship customer orders is a write-off.

Where to write it off: Schedule C, Box 27b
Supplier costs

Fees you pay your vendor or supplier can be written off.

Where to write it off: Schedule C, Box 36 (COGS)
Online advertising

Ad campaigns on Google, Meta, TikTok, and more are all deductible on your taxes.

Where to write it off: Schedule C, Box 8
Inventory storage

If you keep your inventory in a warehouse, you can write off your rent on it.

Where to write it off: Schedule C, Box 20b
Email marketing software

Write off any email marketing software like Mailchimp or ActiveCampaign.

Where to write it off: Schedule C, Box 18
AI tools

Write off AI tools you use to manage listings, edit product photos, or market your store.

Where to write it off: Schedule C, Part V
Camera equipment

Any equipment you use to shoot promotional tapes, portraits, and more can be written off.

Individual items under roughly $2,500 can be expensed up front under the de minimis safe harbor instead.

Where to write it off: Schedule C, Box 13
Card processing fees

The 2.75% fee (give or take) that you pay your payment processors adds up. It's deductible!

Where to write it off: Schedule C, Box 10
Platform commissions

Online seller platforms take some of your money on every sale. You can deduct those costs!

Where to write it off: Schedule C, Box 10
Platform search placements

Sponsored search placements on Amazon, Etsy, and more are deductible advertising expenses.

Where to write it off: Schedule C, Box 8
Materials & equipment

Make your own products? If you sell, say, hand-embroidered clothes, write off the fabric, floss, and your Singer.

Materials consumed making the product are cost of goods sold. Reusable equipment like a sewing machine is depreciated on Box 13 instead.

Where to write it off: Schedule C, Box 38 (COGS)
Personalized merch

Deduct anything you order to show off your personal brand: T-shirts, stickers, mugs, and more.

Where to write it off: Schedule C, Box 8
Creative assistance

If you need to hire an editor, designer, photographer, or other creative pro, write off what you pay them.

Pay any one contractor $600 or more in a year and you'll need to file a Form 1099-NEC for them.

Where to write it off: Schedule C, Box 11
Social media tools

Write off the tools you use to create assets, schedule posts, or pull analytics.

Where to write it off: Schedule C, Box 18
Liability insurance

Protecting yourself and your business with liability insurance? It's a write-off.

Where to write it off: Schedule C, Box 15
Licensing fees

Fees to renew your license to perform your work are fully deductible.

Where to write it off: Schedule C, Box 23
Returns & chargeback fees

Return and chargeback fees billed separately from ordinary card processing are deductible.

Where to write it off: Schedule C, Box 10

If you drive for work ...

While commuting expenses aren't deductible, errands like picking up inventory, dropping off a package, or meeting with a vendor or supplier are considered work-related. So if you're an online seller who does any of the above, you can write off car expenses!

Parking

Parking for a meeting downtown, or any other work trip, is tax-deductible!

Where to write it off: Schedule C, Box 9
Tolls

A toll while driving to or from a work destination is tax-deductible!

Where to write it off: Schedule C, Box 9
Car purchase & depreciation

If you buy a new car, you can write off part of the cost every year for five years.

Where to write it off: Schedule C, Box 13
Vehicle tool kit

Flashlights, tire iron, duct tape, and other tools you may need in your vehicle are deductible.

Where to write it off: Schedule C, Box 22
Car insurance & registration

Car insurance monthly fees, registration, even roadside assistance are partially deductible โ€” if you use the actual expense method. The standard mileage rate already covers them.

Where to write it off: Schedule C, Box 9
Car maintenance

Oil changes, repairs, and regular checkups are deductible if you use the actual expense method. Take the standard mileage rate instead and they're already baked into your per-mile deduction.

Where to write it off: Schedule C, Box 9

If you discuss work at a restaurant ...

Stocking your fridge with healthy snacks to keep you going through the workday might not count as a business meal. But going for dinner or coffee to talk about your work with fellow online sellers, vendors, accountants, or lawyers does count. So go ahead and write off the cost!

Business meals

If you discuss work with a coworker, mentor, client, or prospective client, it's a write-off โ€” 50% of the tab.

Where to write it off: Schedule C, Box 24b

If you leave town for work ...

There are lots of annual ecommerce seminars, workshops, and conferences around the country each year. If you end up going to any of them to learn and network, you can write the travel costs off as business expenses. This also counts for other work-related trips, like visiting an out-of-town supplier!

Transportation

Planes, trains, and car rentals are all work-related travel costs that can be written off.

Where to write it off: Schedule C, Box 24a
Travel lodging

When you travel for work, lodging expenses such as hotel rooms or Airbnb are write-offs.

Where to write it off: Schedule C, Box 24a
Meals while traveling

When you're traveling for work, your meals are 50% deductible โ€” takeout included. (Long-haul truck drivers subject to DOT hours-of-service rules can deduct 80%.)

Where to write it off: Schedule C, Box 24b

If you work from home ...

Online sellers often have areas of their homes dedicated to photographing products or packaging orders. You might also have a desk where you work on marketing and industry research. Both of these scenarios make you eligible to claim home office deductions!

Home office furniture

A desk, chairs, lamps, and other home office necessities are all tax write-offs. Anything over about $2,500 gets depreciated on Form 4562 instead of written off all at once.

Where to write it off: Schedule C, Box 18
Property repairs

Repairs just for your home office are 100% deductible. Repairs to the rest of your home count too, prorated by your business-use percentage on Form 8829.

Where to write it off: Schedule C, Box 21
Power bill

Gotta keep the lights on in your home office! A portion of your electricity bill counts.

Where to write it off: Form 8829
Property insurance

Whether it's rental or homeowners insurance, you can write off a portion through your home office deduction.

Where to write it off: Form 8829
Water bill

It'd be hard to work in an office without running water, huh? Your water bill counts.

Where to write it off: Form 8829
Wi-Fi bill

You need internet to do your job! If you claim a home office, deduct it prorated on Form 8829 along with your other utilities. Internet you pay for on the road, purely for work, is 100% deductible.

Where to write it off: Schedule C, Box 25

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