What Are 9 Year-End Tax Planning Steps for Shopify Brands?
You crushed Q4. Now close the books like a pro. Here’s the exact 9-step Shopify year-end checklist that turns chaos into clean, audit-ready numbers.
Summary of What This Blog Covers
- Inventory counts + landed cost rebuild
- A2X + clearing account reconciliation
- COGS from shipments (not purchases)
- Sales tax, payroll, owner pay, prepaids, and a clean extension
1. Physical inventory count
Freeze receiving → count → document variances → adjust books. This is your COGS anchor.
2. Rebuild landed cost
Freight, duty, fees allocated to SKUs → accurate inventory value and COGS.
3. Run A2X reconciliation with clearing account
Payouts ≠ revenue. Map fees, refunds, reserves correctly.
4. Post COGS from shipments, not purchases
Only shipped units hit COGS — unsold inventory stays on balance sheet.
5. Review sales tax exposure
Nexus check + reconcile what Shopify collected vs. what you owe.
6. True-up payroll & owner pay
Reasonable salary, bonuses, distributions — all clean and documented.
7. Targeted prepaids & Section 179 purchases
Only accelerate what you’ll use in ≤12 months.
8. Estimate & safe-harbor payment by Jan 15
Pay 90% of 2025 or 100%/110% of 2024 — no penalties.
9. File extension the smart way
Pay with the extension → finish the checklist → file clean in April or October.
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Frequently Asked Questions
1) Do I really need a physical inventory count?
Yes — it’s the only way to get accurate COGS and avoid big surprises.
2) Can I trust my 3PL’s count?
Trust, then verify — especially on top sellers and high-value SKUs.
3) What if I don’t have landed cost by SKU?
Allocate monthly totals by units or cost — document the method and reuse it.
4) Should I accelerate expenses?
Only targeted prepaids with clear 12-month value — random ones hurt cash flow.
5) Are extensions a red flag?
No — paying with the extension and filing clean later is smart, not suspicious.