Taxes for Amazon resellers: the documents, the 1099-K and sales tax

Tax season is when a lot of new resellers find out their Amazon numbers don't line up. The 1099-K shows one figure, the bank deposits show another, and neither of them is profit. This guide walks through the documents Amazon gives you, what each one means, what Amazon handles on sales tax, and what can still be yours to deal with. It belongs to the last stage of the wholesale roadmap, alongside bookkeeping and payouts.

Every rule below comes from the IRS, Amazon's US pages or a state tax agency, and we link each one. They are the final word if anything here disagrees with them. Tax law changes, and your own situation (your state, your business structure, where else you sell) changes the answer, so use this page as a map for the conversation with your accountant.

The documents Amazon sends

Amazon gives you less tax paperwork than most people expect: one tax form at most, plus reports you pull yourself. Here's the full set.

What Amazon never sends is anything that shows profit. It knows your sales and its own fees, but it doesn't know what you paid your suppliers, your freight or your prep center. That part of the picture is yours to keep.

The tax interview comes first. In a staff post on its Seller Forums about 1099-K forms, Amazon says every selling partner has to complete the Tax Information Interview, whatever their sales, to verify their taxpayer identity. You do it while creating your seller account. Two parts of it matter later:

• The name and taxpayer ID. This is what the 1099-K will carry, so use the same business details you use with your bank and your suppliers. If your business has an EIN, this is where it goes.
• The address. Amazon's tax season post says paper forms go to the address in your tax interview. Update it there when you move.

Getting the ID right matters for another reason. When a payer doesn't have a correct taxpayer ID for you, the IRS requires it to start backup withholding, a flat 24 percent taken from future payments.

Payments reports aren't tax forms, but they're what your accountant actually works from. Each settlement report lists every sale, fee, refund and adjustment behind one payout. Our payouts guide explains how to read them, including the reserve and delivery-date timing that make your deposits drift away from your sales.

1099-K

The 1099-K is the form people search for every January, and the one that causes the most confusion, mostly because it shows a number much bigger than anyone's profit.

Who gets one

The federal rule is two tests, and you have to pass both. The IRS says payment apps and online marketplaces report when your gross payments for goods or services exceed $20,000 and there are more than 200 transactions. Amazon's tax season post for 2025 says the same for its US sellers: more than $20,000 in unadjusted gross sales and more than 200 transactions.

Two things change that table:

• Your state. The IRS says your state may set a lower reporting threshold, so you can get a 1099-K even when you're under the federal one. Amazon's post says the same: certain states have a different threshold from the IRS.
• Nothing changes what you owe. The IRS says that whether or not you receive a Form 1099-K, you must still report your income. The threshold decides who gets a form, not whose sales are taxable.

Why some articles say $600 or $5,000. The American Rescue Plan Act of 2021 lowered the threshold to $600, and the IRS phased that in slowly. Its Notice 2024-85 set the bar at more than $5,000 for 2024, more than $2,500 for 2025 and more than $600 from 2026. Then a 2025 law, the One, Big, Beautiful Bill, retroactively reinstated the threshold from before the 2021 law: more than $20,000 and more than 200 transactions. The IRS announced it in a release on October 23, 2025. Any page still quoting the phase-in numbers was written before that.

What's on the form

The IRS's instructions for the form describe each box. These are the ones a seller looks at.

Gross means gross. The IRS says Box 1a isn't adjusted for fees, credits, refunds, shipping, cash equivalents or discounts. Amazon's earlier staff post on 1099-K forms says its figure is unadjusted gross sales, including shipping, gift wrap and taxes. So the number on your form can include sales tax that Amazon collected from your buyers and paid to the states for you. You never kept that money, and it is one of the first things to point out to your accountant.

From the 1099-K to profit: one example

Here is one example with made-up numbers, just to show the math. It isn't a typical result.

The form says $60,000. In this example the business made $7,000. The IRS says fees and refunds are not taxable income and that you can deduct them from the gross amount. Exactly how each line lands on your return is your accountant's job. What matters is that the 1099-K is the starting line, never the answer. The fees guide explains every Amazon fee that goes into a line like the one above.

Where to find it, and when

• Where: in Seller Central, go to Reports, then Tax Document Library, choose the year, then Form 1099-K.
• Who can see it: Amazon says to sign in as the primary user. Other users can't open forms in the Tax Document Library.
• When: Amazon's post says paper forms are postmarked on or before January 31, to the address in your tax interview. Amazon's earlier post says you can choose electronic delivery for faster access.
• If you expected one and there's nothing: check both tests against your year, check you're signed in as the primary user, and then ask Seller Support.

When the numbers look wrong

Reconcile before you call anyone. Put the monthly boxes (5a to 5l) next to Amazon's payments reports for the same months. The common causes are plain ones: refunds that the gross figure doesn't subtract, tax and shipping that it includes, and deposits that land after fees and reserves have been taken out.

If the form really is wrong, the IRS says to contact the issuer, which is Amazon, for a corrected form. The IRS can't correct a 1099-K for you. It also says not to hold up your return while you wait, and to keep copies of the original form, any corrected one, and your messages about it. If a corrected form never comes, the IRS page on what to do with Form 1099-K explains how to report the difference on your return. Work through that one with your accountant.

Sales tax: what Amazon collects and what can still be yours

Here is how sales tax works on an ordinary Amazon order. The buyer pays the tax at checkout, Amazon keeps track of it, and Amazon sends it to the state. Amazon's Marketplace Tax Collection page explains that under marketplace facilitator laws, Amazon calculates, collects, remits and refunds sales tax on third-party sellers' orders going to the states where those laws are in effect. The page lists those states with the date each one started.

Stef puts the Amazon side simply in his Checklist lesson (at 3:24): when you sell on Amazon, Amazon is already collecting the sales tax for you. For your Amazon orders to the states on that list, that's right. What Amazon's page doesn't say is that you have nothing else to do. It describes Amazon's side of your Amazon orders. Depending on the state, these can still be yours:

• Registration in your home state. Some states want a sales tax registration from their own sellers even when every sale goes through a marketplace.
• States where your inventory sits. FBA stores your units in warehouses around the country, and some states treat inventory stored there as doing business there.
• Sales you make off Amazon. Your own website, a local sale, or anywhere no marketplace collects the tax for you.
• The tax on your own purchases. A resale certificate lets you buy inventory without paying sales tax, and it rests on a state registration, usually called a seller's permit. Our resale certificate guide covers that side state by state.

Two states show how far apart the answers are.

Sources: the Texas Comptroller's remote seller and marketplace FAQ and CDTFA's Marketplace Facilitator Act guide. Texas also asks marketplace sellers to keep records of all their marketplace sales for at least four years.

Two states, two different answers, and there are many more. Look up your own state's revenue department page for marketplace sellers, and ask a CPA before you register in a new state or decide you don't need to.

Income tax basics for resellers

Profit is what's taxed, not sales

Income tax is figured on what's left after your costs. For a reseller that's roughly sales, minus refunds, minus what the units you sold cost you, minus Amazon's fees and your other business expenses. That's why the records further down matter more than any form Amazon sends.

Where it goes on the return

• A sole proprietor (one owner, not incorporated) reports the business on Schedule C with their Form 1040, the IRS says.
• A single-member LLC is, by default, disregarded as separate from its owner for income tax, the IRS says. Its activity goes on the owner's return, on Schedule C for an individual owner. It can choose to be taxed as a corporation instead, with Form 8832.
• Partnerships and corporations file their own returns. If you have partners, or you're thinking about an S corporation, that's a CPA conversation before the year starts.

Whether to form an LLC in the first place is covered in our guide to opening a wholesale account.

Inventory you bought isn't all an expense this year

This is the one that surprises resellers most. The IRS's Publication 334 says its chapter on cost of goods sold applies to wholesalers and retailers. The calculation starts with the inventory you had at the start of the year, adds your purchases, and subtracts the inventory you still have at the end. So stock that's still sitting at Amazon on December 31 generally isn't part of this year's cost of goods sold. It carries into next year.

There are exceptions. The Schedule C instructions say a small business taxpayer, which is one that passes a gross receipts test indexed for inflation, can choose not to keep an inventory, and Publication 538 says the method still has to clearly reflect income. Which method fits your business is a decision to make with a CPA, and ideally before you place a big year-end order you're hoping will lower your bill.

Self-employment tax

On top of income tax, a sole proprietor, or the owner of a single-member LLC taxed the default way, likely owes self-employment tax. The IRS says the rate is 15.3 percent (12.4 percent for Social Security and 2.9 percent for Medicare), it applies when your net earnings from self-employment are $400 or more, and you figure it on Schedule SE. You can deduct the employer-equivalent portion of it when you figure your adjusted gross income.

Estimated tax payments

No employer is withholding income tax from your Amazon payouts. The IRS says sole proprietors, partners and S corporation shareholders generally have to make estimated tax payments during the year if they expect to owe $1,000 or more when they file, using Form 1040-ES across four payment periods, and that paying too little or too late can mean a penalty. It's an easy one to miss in a first profitable year.

Most states tax income too, each with its own rules. Your CPA handles the state return alongside the federal one.

Records to keep

The IRS's list of records to keep asks for supporting documents behind your gross receipts, your purchases of items for resale (invoices and proof of payment) and your expenses. For an Amazon reseller, that turns into this:

How long to keep them. The IRS's record retention page gives the periods. Three years is the general rule. It's six years if you leave out income that is more than 25 percent of the gross income on your return, seven years if you claim a loss from worthless securities or a bad debt deduction, and indefinitely if you don't file a return.

If those records live in a spreadsheet, a shoebox and Seller Central, tax time is a scramble. Our bookkeeping guide has a monthly routine that keeps them in one place, and the purchase order workflow shows how to keep supplier costs tied to each order.

When to call a CPA

Earlier than you think. An accountant is most useful before the year's decisions are made, not after. These are the moments to pick up the phone:

• Before your first year with real sales, so your books, structure and estimated payments are set up from the start.
• When your first 1099-K arrives, or when one doesn't match your own numbers.
• Before you form an LLC, add a partner or change how the business is taxed.
• When sales tax gets real: your home state wants a permit, a state writes to you, or you start selling somewhere Amazon doesn't collect for you.
• When you turn a profit, because that's when estimated payments and self-employment tax start to matter.
• Before a big year-end inventory order you hope will lower your tax.

What to bring. Your 1099-K, Amazon's payments reports for the year, your profit and loss statement, the year-end inventory count with costs, your supplier invoices, your list of expenses and any sales tax registrations.

What to ask a CPA you're thinking of hiring. Do they work with Amazon or other online sellers now? How do they reconcile a 1099-K with Amazon's settlement reports? How do they handle inventory and cost of goods sold for a small reseller? Can they tell you where you need to register for sales tax? Amazon's tax season post also points sellers to its Service Provider Network to find tax professionals.

Stef says the same at the end of the walkthrough lesson in Apex University:

"If you have anything else that you're missing out, just make sure you talk to your accountant, to your CPA, so your books run very clean and you don't pay more taxes than you need to."

From Stef's lesson (Apex Applications Walkthrough, at 25:37)

That's his experience running his own Amazon business. Clean books first, then a professional who can read them.