In this video, the discussion centers around what Amazon reports to the IRS and how sellers should handle their financial reporting, especially regarding taxes. A common question raised by sellers is whether Amazon reports all sales to the IRS or only the amounts transferred to the seller's bank if no 1099 is issued.
Amazon is required to report total, unadjusted gross sales to the IRS, which includes all transactions, even if the seller does not receive a 1099 because they didn't meet the threshold of $20,000 in sales and 200 transactions. To get accurate financial information, sellers should look at their reports in Amazon Seller Central, adjusting the date range to cover the relevant fiscal year.
For tax filings, it's important to report top-line sales—total sales before deducting any fees or expenses—on the seller’s P&L (Profit and Loss statement). After reporting these gross sales, sellers can then deduct all expenses, such as Amazon commissions, FBA fees, advertising costs, and the cost of goods sold. Organizing these deductions properly helps to clarify both gross profit and net income.
This video explains these key concepts to help sellers accurately report their income and manage their taxes. Be sure to watch the video below for a more in-depth explanation.
Amazon is required to report total, unadjusted gross sales to the IRS, which includes all transactions, even if the seller does not receive a 1099 because they didn't meet the threshold of $20,000 in sales and 200 transactions. To get accurate financial information, sellers should look at their reports in Amazon Seller Central, adjusting the date range to cover the relevant fiscal year.
For tax filings, it's important to report top-line sales—total sales before deducting any fees or expenses—on the seller’s P&L (Profit and Loss statement). After reporting these gross sales, sellers can then deduct all expenses, such as Amazon commissions, FBA fees, advertising costs, and the cost of goods sold. Organizing these deductions properly helps to clarify both gross profit and net income.
This video explains these key concepts to help sellers accurately report their income and manage their taxes. Be sure to watch the video below for a more in-depth explanation.