Reporting
Reconcile Form 1099-K to your books
Federal 1099-Ks are required above $20,000 and 200 transactions, but some states require them at $600. The IRS matches the form to your return, so tie it out to your books.
Home / Strategies
The e-commerce seller tax strategy library
Sellers face two tax systems at once: income tax on profit and sales tax on every order in dozens of states.
Sales tax
Map your sales tax nexus
Marketplace facilitators collect on their platforms, but your Shopify site and wholesale sales are your responsibility. A nexus study shows where you must register.
Accounting
Choose the right inventory method
The choice affects when you deduct product costs. A switch generally requires Form 3115 with a §481(a) adjustment.
Entity
S corp plus Solo 401(k)
Pay yourself a reasonable salary, defer $24,500, have the S corp contribute 25% of salary, and keep distributions free of payroll tax.
Deduction
Protect the 20% QBI deduction
Owner salary, employee wages, and owned property all affect the wage-and-property limit, so they should be modeled together.
Global
Plan for international sales and suppliers
Selling into the EU or UK can require VAT registration on the first sale. Duties and landed costs generally belong in inventory cost, not expenses.
Connecticut
Get Connecticut sales tax and the PET right
Remote sellers must register once they have both $100,000 of gross receipts and 200 sales into Connecticut. Sellers based in the state need a $100 permit before their first sale. S corps and partnerships can elect the PET each year on a timely filed return, and owners get a refundable credit for 87.5% of it.
Find out where you owe sales tax and what you could keep.
In a consultation, we look at your sales by state, Forms 1099-K, and last return, estimate whether an S corp and Solo 401(k) could lower your tax, and tell you where you may need to register.
Book a free consultation
or call (203) 327-4311
The first consultation is free, with no obligation.