30 Tax Write-Offs for Online Sellers
NAICS business codeYour NAICS business code is a six-digit string of numbers that shows the type of work your business does. NAICS stands for North American Industry Classification System. When you do your taxes, you'll enter it in Box B of your Schedule C.455000
Reviewed bya tax professionalThis content has been reviewed by an Enrolled Agent (EA) with the IRS — the highest credential awarded by the agency. Enrolled Agents are empowered to represent all taxpayers before the IRS, on all types of tax-related matters. Accountants who earn this certification have passed a comprehensive three-part exam on individual and business tax returns. To maintain EA status, they must stay up to date in the field by completing 72 hours of continuing education every three years.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 all the everyday sort of business purchases you make all the time.
It doesn't matter if you're selling on eBay, 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.
From merchandise to shipping supplies, any ordinary expense your store runs you can also save you money in the long run! And we’ve made it even easier, by compiling a list of the best write-offs for online sellers in one place. It’s like applying an automatic coupon at checkout!
Deduct what you pay for ecommerce programs like Shopify and WooCommerce.
Bubble mailers, boxes, tissue paper and more: anything you buy to ship customer orders is a write-off.
Fees you pay your vendor or supplier can be written off.
Ad campaigns on Google, Meta, TikTok, and more are all deductible on your taxes.
If you keep your inventory in a warehouse, you can write off your rent on it.
Write off any email marketing software like Mailchimp or ActiveCampaign.
Any equipment you use to shoot promotional tapes, portraits, and more can be written off.
The 2.75% fee (give or take) that you pay your payment processors adds up. It's deductible!
Online seller platforms take some of your money on every sale. You can deduct those costs!
Sponsored search placements on Amazon, Etsy, and more are deductible advertising expenses.
Make your own products? If you sell, say, hand-embroidered clothes, write off the fabric, floss, and your Singer.
Deduct anything you order to show off your personal brand: T-shirts, stickers, mugs, and more.
If you need to hire an editor, designer, photographer, or other creative pro, write off what you pay them.
Write off the tools you use to create assets, schedule posts, or pull analytics.
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 for a meeting downtown, or any other work trip, is tax-deductible!
A toll while driving to or from a work destination is tax-deductible!
If you buy a new car, you can write off part of the cost every year for five years.
Flashlights, tire iron, duct tape, and other tools you may need in your vehicle are deductible.
Car insurance monthly fees, registration, even roadside assistance are partially deductible.
Oil changes, repairs, and regular checkups are all tax-deductible if you drive for work.
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!
If you discuss work with a coworker, mentor, client, or prospective client, it's a write-off!
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!
Planes, trains, and car rentals are all work-related travel costs that can be written off.
When you travel for work, lodging expenses such as hotel rooms or Airbnb are write-offs.
When you're traveling for work, all meals are tax-deductible. Even takeout!
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!
A desk, chairs, lamps, and other home office necessities are all tax write-offs.
You can write off up to $2,500 for individual repairs to your property.
Gotta keep the lights on in your home office! A portion of your electricity bill counts.
Whether it's rental or homeowners insurance, you can write off a portion through your home office deduction.
It'd be hard to work in an office without running water, huh? Your water bill counts.
Your Comcast bill is a tax write-off. You need internet to do your job!
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