Amazon Seller Central spits out CSVs nobody can read. Shopify hides COGS. Etsy sends a 1099-K that doesn't tie to anything. We turn it into clean books, a Schedule C or 1120-S, and a multi-state sales tax answer that actually works.
Marketplace facilitator laws shifted everything in 2019 to 2020. Then UNICAP came back into focus. Then ad-spend tracking got harder with iOS 14. Most CPAs don't know the difference between FBA inventory and sales tax nexus. We do.
Since South Dakota v. Wayfair (2018), economic nexus is real in 45+ states. Typical threshold: $100K sales or 200 transactions per state. Amazon FBA also creates physical nexus the day your inventory lands in a state's warehouse. We map nexus, register where required, and use marketplace facilitator rules to limit your exposure.
South Dakota v. Wayfair Inc. (2018); state marketplace facilitator statutesInventory is not a deduction when you buy it. It's COGS when you sell it. We reconcile beginning + purchases - ending to actual COGS so your gross margin is real and the IRS sees Schedule C Part III numbers that match your bank.
IRC §471; Treas. Reg. §1.471-2; Form 1125-AThe 2024 small business exception (avg. gross receipts under $30 million for 3 prior years) lets most sellers skip UNICAP entirely. Above that, you capitalize indirect costs (warehousing, prep, certain admin) into inventory. We document the exemption or run the calc, whichever applies.
IRC §263A(i); Rev. Proc. 2023-34; Treas. Reg. §1.263A-3Amazon Sponsored Products, Google Shopping, Meta ads, TikTok ads, influencer payouts. Each platform reports differently. Some bill in advance (prepaid expense), some in arrears. We code it to advertising expense on Schedule C and reconcile monthly so your tax return matches your actual ROAS.
IRC §162(a); Treas. Reg. §1.162-1Selling on Amazon UK, EU, JP, AU? You may owe VAT, claim a Foreign Tax Credit, or trigger Subpart F if you used a foreign entity. We file Form 1116, Form 5471 where needed, and keep your global income reconciled to the US return.
IRC §901, §951; Form 1116; Form 5471Threshold dropped, then paused, then phased. For 2024 the IRS is using $5,000 then $2,500 in 2025 then $600 in 2026. We tie every 1099-K from Amazon, Shopify Payments, PayPal, Stripe, and Etsy to gross receipts so the IRS matching program doesn't flag you.
IRC §6050W; IRS Notice 2024-85Amazon FBA seller, $1.4M gross 2024, supplements category. Prior bookkeeper had COGS overstated by $180K and missed nexus in 6 states.
$47,200 savedCorrected COGS plus voluntary disclosure settlements that capped 3 years of back sales tax instead of 7. Penalties waived.