FBA Taxes Are a Beast — Here’s How to Tame It

Meet Megan:

A first-time seller, bright-eyed, crushing it with her pet hair tools brand.
She scaled to $28K in monthly sales in 90 days.

Her problem?

She treated her Amazon business like a side hustle…
…but the IRS treated it like a business.

Big difference.

💀 Her April Reality Check

Megan’s CPA hit her with this:

Her face went pale.

She owed $11,000 in taxes.
And that was after scrambling to find old receipts, late deductions, and playing QuickBooks catch-up for 6 months.

No joke — she almost had to pull money from her retirement account to pay it off.

⚠️ The 3 Silent Killers of New FBA Sellers

If you're reading this, you're probably doing the same thing Megan did — selling, scaling, and not thinking about taxes.

Here are the landmines to avoid:

💸 1. You’re Not Saving for Income Tax

Amazon drops money in your account every two weeks.
Feels like a paycheck, right?

Wrong.

Nobody’s holding back taxes for you.
You're the employer and the employee. That means self-employment tax + income tax.

What to do:
Put aside 25–30% of your profits every month. Create a tax-only bank account.
Pretend it doesn’t exist until April.

📦 2. Inventory Isn’t Just Product — It’s Taxable

You can’t just guess your COGS (cost of goods sold).
You need to track what’s in Amazon warehouses at year-end.

Amazon gives you a report — but it’s up to you to:

• Calculate your ending inventory

• Factor it into your P&L

• Report it accurately

Screw this up?
You could be overpaying (or underreporting — and get audited).

🌍 3. Sales Tax Nexus Is Still a Thing

Even though Amazon collects and remits sales tax in most states, that doesn’t mean you’re in the clear.

Why?

Because FBA creates nexus in every state where Amazon stores your inventory.

Some states still want:

• Sales tax permits

• Annual reports

• Franchise tax filings

It’s a paperwork mess.
Skip it, and you might get love letters from the Texas Comptroller or California Franchise Board. 🥴

🛠️ So How Do You Stay Safe?

Here’s the bare minimum I recommend to new sellers:

✅ Step 1: Use a Bookkeeping Tool from Day One

Tools like:

• Bench

• QuickBooks + A2X

• Sellerboard (for profit tracking)

Let the software handle the math. You just check the dashboard and stay out of trouble.

✅ Step 2: Hire a CPA Who Understands Ecommerce

Not your cousin’s tax guy who only does W2s and TurboTax.
You want someone who knows FBA, 1099-Ks, and inventory accounting.

Ask:

✅ Step 3: Save for Taxes Like You Save for Black Friday Inventory

Set aside money like it’s a future purchase order — because it is.
Just for the IRS instead of your supplier. 😅

🎯 BIG TAKEAWAY:

Success doesn’t mean more sales. It means keeping what you earn.

Most FBA sellers get tripped up not by competition —
—but by unpaid taxes they didn’t see coming.

💬 Say it with me:
“Profit is what you keep — not what you sell.”

🙋‍♂️ Had your own tax oops? Or dodged one thanks to good advice?

Comment if you’ve been there 👇
Forward this to a seller friend who’s scaling fast but missing the backend 💌
Save it now — your future self will thank you 🔖

Pay smart. Sell smart. Sleep better.

To your success,
Andy Splichal
Founder & Managing Partner of True Online Presence & Author of the Make Each Click Count Book Series

P.S. If you're tired of wasting money on ads that don’t convert — and you're ready to take your Amazon PPC from “meh” to money machine — let’s chat. I offer done-for-you ad management that actually works (no fluff, just ROI).

📅 Click here to book a call with me — let’s scale this thing 🚀