Running an eCommerce business is exciting until tax season hits, and you realize you might be leaving money on the table. If you’re not tracking your deductions properly, you could be overpaying the IRS instead of reinvesting that cash into your business.
The good news? You don’t have to be a tax expert to save money—but you do need to know which deductions you should be taking. As an experienced Austin, Texas CPA, we’ve seen too many Shopify and Amazon sellers miss out on tax savings just because they didn’t know better.
Let’s fix that. Here are seven must-know tax deductions that can help you keep more of your hard-earned profits (without any IRS drama).
1. Inventory Costs & Cost of Goods Sold (COGS)
If you sell physical products, your inventory is probably your biggest expense so let’s make sure you’re deducting it correctly.
What you can write off:
- Product materials & wholesale purchases
- Shipping costs for inventory
- Amazon FBA storage & fulfillment fees
- Packaging & labeling supplies
Why it matters:
If you’re not properly categorizing your COGS (Cost of Goods Sold), you could be overstating your taxable income—which means paying more taxes than you actually owe.
Pro Tip: At Insogna CPA, one of the top CPA firms in Austin, Texas, we make sure your COGS is properly tracked so you only pay tax on your actual profits.
2. Marketing & Advertising Expenses
Growing an eCommerce brand takes marketing, and the best part? It’s all tax-deductible.
What you can write off:
- Facebook, Instagram & Google Ads
- Influencer sponsorships & affiliate partnerships
- Website design & branding costs
- Email marketing tools like Klaviyo or Mailchimp
Pro Tip: If you’re running ads but not tracking your ROI, you’re throwing money away. As a trusted Austin tax accountant, we not only help you deduct these costs, but also ensure you’re making data-driven marketing decisions.
3. Home Office & Remote Work Deductions
Running your business from home? You might qualify for a home office deduction.
What you can write off:
- A percentage of your rent or mortgage (if you have a dedicated home office)
- Business-related phone & internet bills
- Office supplies & furniture
Heads up: The IRS has strict rules on this one. So before you try to deduct your entire apartment, let’s make sure you’re doing it the right way with an expert tax advisor in Austin (that’s us!).
4. Software Subscriptions & Shopify Fees
Running an eCommerce business means using a ton of digital tools. Good news? They’re all tax-deductible.
What you can write off:
- Shopify, Amazon, and Etsy seller fees
- QuickBooks, Avalara, TaxJar, and other accounting software
- Email marketing & CRM tools
- Inventory management software
Pro Tip: Those monthly subscriptions add up fast but they’re easy to overlook. We help Shopify and Amazon sellers track every deductible dollar at Insogna CPA, a trusted Austin small business accountant.
5. International Shipping & Logistics Costs
Selling internationally? Your shipping and fulfillment expenses are deductible.
What you can write off:
- International & domestic shipping fees
- Customs duties & import taxes
- Packaging materials & fulfillment center costs
- Return shipping expenses
Many sellers miss this one. If you’re selling across borders, let’s make sure you’re not overpaying on taxes. As one of the best Austin accounting firms, we’ll make sure every shipping cost is properly categorized.
6. Employee Payroll & Contractor Payments
If you’ve hired employees, freelancers, or VAs, their wages are fully deductible.
What you can write off:
- Employee salaries & bonuses
- Contractor & freelancer payments (1099-NEC)
- Payroll taxes & employee benefits
Why it matters:
Employee vs. contractor classification can impact your tax liability big time. As a leading Austin accounting service, we help eCommerce businesses structure payroll in the most tax-efficient way.
7. Business Travel & Networking Expenses
Attending conferences, trade shows, or meeting with suppliers? That’s a tax deduction.
What you can write off:
- Flights & transportation
- Hotels & lodging
- Business meals & networking events
- Conference tickets & industry events
Pro Tip: Keep detailed receipts—the IRS loves to scrutinize travel expenses. Need help keeping track? At Insogna CPA, one of the most experienced CPA firms Austin, Texas has to offer, we’ll ensure your records are IRS-ready (just in case).
Want to Keep More of Your Money? Let’s Make It Happen.
Most eCommerce sellers leave money on the table simply because they don’t know what they can deduct. Don’t be one of them.
At Insogna CPA, we specialize in eCommerce businesses—so we know exactly how to:
- Maximize your tax deductions (without raising red flags).
- Ensure your books are clean & tax-ready.
- Help you reinvest your savings back into your business.
Let’s make sure you’re getting every deduction you deserve. Schedule a call with Insogna CPA today, and start keeping more of your hard-earned profits!
Whether you need a small business CPA in Austin, an Austin, TX accountant, or a tax advisor in Austin who actually understands Shopify, Amazon, and online sales tax compliance—we’ve got you covered!