Are you confused about business tax deductions?
A question commonly asked by Amazon sellers is what is deductible on a business tax return. The key to understanding what is and isn’t deductible is whether or not an expense is ordinary and necessary.
The IRS definition of “ordinary and necessary” is this: an ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your business.
Please note: This post is a general guide for Amazon, eBay, and other inventory-based business owners and should not be used when preparing your tax return. It is very important that you hire a Certified Public Accountant (CPA) to prepare your tax return for you. You can certainly hire a bookkeeper to do your books, or you can do them yourself, but please be sure you budget adequately so you can hire a CPA to prepare and file your tax return for you.