Amazon FBA & Ecommerce Tax Preparers 🧾
If you are starting your business on Amazon FBA, chances are you’ll be handling customer service duties and shipping products yourself. But what about taxes? As a seller, you’ll have to pay taxes on the profit earned from shipping products and handling customer service.
If you are doing this on your own, you’d better have a strong understanding of tax laws and be aware that mistakes can lead to penalties. That’s where tax preparation firms come in.
They ensure all business aspects are covered while reducing the chance of errors and improving returns. In this post, we will talk about how important hiring a tax preparation firm is for an e-commerce business like Amazon FBA.
Advantages of Selling Through Amazon 🏷️
Selling products on Amazon is a great way to increase your income.
Selling products on Amazon has many business models, such as wholesale, reselling/arbitrage, dropshipping, and handmade.
The wholesale business model provides sellers with stable and high-revenue business models by providing them with bulk order discounts and a margin share. With reselling/arbitrage models, sellers can earn money from product purchases made by customers multiple times.
The most popular business model is dropshipping. This business model involves selling products directly from the manufacturer’s e-commerce store without owning the physical product. The process is similar to a virtual e-commerce store, but with a few key differences.
Finally, the handmade business model is also gaining popularity among Amazon FBA sellers. This business model involves making products by hand in small batches and offering it for sale on amazon fba
With these business models and fees, there are plenty of options for amazon FBA sellers to choose from
However, amazon FBA sellers must be aware of all the formalities involved in the process so that they can make the most of it
The Importance Of Hiring A Professional Tax Preparation Firm For Your FBA Business 🏢
Amazon sellers using the FBA program are advised to consider hiring a professional tax preparation firm.
A professional tax preparer can help sellers maximize deductions and ensure they don’t overlook any relevant tax credits.
Professional tax preparation firms can also help Amazon sellers save time and money by ensuring their taxes are done correctly and efficiently.
By hiring a tax professional, you reduce the risk of an audit by making sure all documents are properly filled out and submitted.
Furthermore, a professional tax preparer can help amazon sellers understand the more complex aspects of their taxes such as the capital gains tax, which can be complicated to understand.
Thus, it is beneficial for amazon sellers to hire a professional when filing their ecommerce tax returns.
Reconciling Amazon’s 1099 K Form with the Sales Declared on the Tax Return 📜
Review the 1099-K form to identify all sales reported to the IRS.
Compare the total of sales on the 1099-K with the total of sales reported to tax authorities on a tax return.
Determine if the discrepancies between the two totals are the result of refunds, fees, or other costs.
Make adjustments to the tax return if there are discrepancies between the 1099-K and sales declared on tax returns.
Keep records of adjustments, refunds, and fees as evidence for future filings.
Amazon has made e-commerce a household name. Many entrepreneurs have taken to the business model with great success.
However, the e-commerce giant isn’t ‘e-satisfying’ everyone. The unique selling proposition is that you can sell your products on their platform and be your customer’s seller, as well.
Outsourcing your product listing, product research, product photography, and product shipping to amazon will help you save time and money.