If you are selling on Amazon FBA, you know the feeling: Amazon takes a fee for everything. Check this Amazon FBA tax deductions article.
Referral fees, FBA pick & pack fees, storage fees, advertising fees… by the time the money hits your bank account, it feels significantly lighter.
But here is the secret that profitable 7-figure sellers know: Almost every single one of those painful fees is a golden ticket to lowering your taxes.
The IRS taxes you on your profit, not your revenue. The more legitimate deductions you claim, the less you pay. And thanks to the new “One Big Beautiful Bill Act” (OBBBA) passed for the 2025-2026 tax years, there are massive new write-offs available that didn’t exist before.
Here is your ultimate checklist for 2026. Stop leaving money on the table.
The “Holy Trinity” of Amazon FBA tax Deductions
These are the big three that will likely make up 80% of your expenses. If you aren’t tracking these perfectly, you are basically donating money to the government.
1. Amazon Seller Fees (The Obvious One)
Every time Amazon charges you, that is a deduction.
- Referral Fees: The 15% (usually) commission Amazon takes.
- FBA Fulfillment Fees: The cost to pick, pack, and ship your item.
- Monthly Subscription: The $39.99/mo Professional Seller fee.
- Storage Fees: Both monthly and “Aged Inventory Surcharges” (long-term storage).
Pro Tip: Don’t try to calculate this manually. Go to Seller Central > Reports > Payments > Date Range Reports. Download the “Summary” for the whole year. It gives you one perfect number for “Expenses.”
2. Cost of Goods Sold (COGS) – The Tricky Part
This is where most new sellers fail. You generally cannot deduct inventory until you sell it.
- Scenario: You buy $10,000 of garlic presses in December 2025. You sell none of them until January 2026.
- Tax Result: You cannot deduct that $10,000 on your 2025 tax return. It is an “Asset,” not an expense. You deduct it in 2026 when the sales happen.
Exception: If you are a “Small Business” (under $30M revenue), the IRS allows you to use the “Cash Method” or treat inventory as “Non-Incidental Materials and Supplies,” which can simplify this. Ask your CPA if you qualify to deduct inventory immediately.
3. Advertising (PPC)
Amazon Sponsored Products, Sponsored Brands, and even off-Amazon ads (Facebook/TikTok traffic driving to your listing) are 100% deductible.
- Metric to Watch: Your TACoS (Total Advertising Cost of Sales). If your TACoS is high, at least your tax bill will be lower!
The “Hidden” Deductions (2026 Updates)
Here are the expenses that sellers often forget, updated with the new OBBBA laws.
📊 Software & Tools
Running an FBA business requires a tech stack. Deduct them all:
- Product Research: Jungle Scout, Helium 10, Keepa.
- Inventory Management: InventoryLab, SoStocked.
- Repricers: Aura, Bqool.
- Tax Software: TaxJar, Avalara.
🚢 Logistics & Supply Chain
It’s not just the product cost; it’s getting it there.
- Freight Forwarding: The cost of shipping from China/India to Amazon warehouses.
- Customs Duties & Tariffs: These are fully deductible.
- Inspection Services: Did you hire an agent in China to check quality? Deductible.
- Samples: The cost of buying samples from competitors to test quality.
🏠 Home Office (The “Admin Center”)
Even if Amazon stores your boxes, YOU run the business from home.
- If you have a dedicated room for managing your Seller Central account, you can deduct a portion of your rent/mortgage, utilities, and internet.
- Simplified Method: Deduct $5 per square foot of your office (up to 300 sq ft). It’s an easy $1,500 deduction with low audit risk.
🎓 Education & Conferences
- Did you buy a $2,000 course like Amazing Selling Machine? Deductible.
- Did you fly to Las Vegas for the Prosper Show? The flight and hotel are deductible.
- Warning on Meals: Meals at conferences are only 50% deductible. Entertainment (taking a client to a show) is 0% deductible.
The New 2026 “OBBBA” Benefits
The “One Big Beautiful Bill Act” introduced game-changers for 2026:
- 100% Bonus Depreciation is BACK: Did you buy a new laptop, label printer, or camera for your business? You can now deduct 100% of the cost in the first year. You don’t have to spread it out over 5 years anymore.
- R&D Expensing: Did you spend money developing a custom mold for a new private label product? You can now deduct those R&D costs immediately.
- Overtime Deduction: If you work a W-2 job and use overtime pay to fund your Amazon business, that overtime income might be tax-free (up to $12,500), giving you more capital to launch products.
Summary Checklist
| Category | Deducible? | Notes |
| Amazon Fees | ✅ Yes | Use Date Range Reports |
| Inventory (COGS) | ✅ Yes | Only when sold (usually) |
| PPC Ads | ✅ Yes | Includes Facebook/Google Ads |
| Software | ✅ Yes | Helium 10, Jungle Scout, etc. |
| Education | ✅ Yes | Courses & Conferences |
| Home Office | ✅ Yes | Must be exclusive use |
| Sales Tax | ❌ NO | You collect this from buyers, it’s not an expense |
Now that you are saving money on taxes, ensure you stay compliant. Check our guide on Sales Tax Nexus to see where you need to register, or learn about the Quarterly Estimated Taxes deadlines.