When selling products on Amazon, there is an important question to consider in regards to taxes: do I have to report Amazon sales on my taxes? The answer is yes, you must report all income from your Amazon sales on your taxes.
Regardless of the platform you use for selling products, the Internal Revenue Service (IRS) requires all income sources to be reported. This includes both online and offline marketplaces such as Amazon, eBay, and Etsy. Even if you are not a full-time seller but just have a few items listed here and there, it’s important that you accurately report the income generated through these sales.
How to Report Income from Amazon Sales
When filing your income tax return, you will need to include all sources of income including those from your Amazon sales. There are two documents that may be used for reporting: Form 1099-K and Form 1099-MISC.
Form 1099-K is generally issued by payment processors like PayPal or Stripe for amounts over $20,000 or more than 200 transactions. Form 1099-MISC is used for amounts under $20,000 and will be sent directly from Amazon. It’s important to note that if you don’t receive a form from them, it doesn’t mean that you don’t need to report the income – you must still include any income received from your Amazon sales in your tax return.
State Taxes
In addition to federal taxes, some states also require sellers to report their online sales. If you live in a state with sales tax laws that require online sellers to collect tax on remote transactions then you will need to register with the state’s taxation department. Depending on where you live, this could include registering as a seller and collecting sales tax from customers when applicable.
Conclusion
Do I have to report Amazon Sales on my taxes? Yes – regardless of whether or not you receive an information form such as 1099-K or 1099-MISC, it’s important that all sources of income are reported accurately on your taxes. Additionally, depending on where you live there may be additional requirements such as collecting state sales tax on remote transactions.