List of Tax Write-Offs Every Reseller Should Use
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Introduction
As a reseller, maximizing your profits isn’t just about finding great deals—it’s also about understanding the tax deductions available to you. Business write-offs can significantly reduce your taxable income, helping you keep more of what you earn. However, many resellers overlook key deductions simply because they’re unaware of them.
Whether you sell on platforms like eBay, Poshmark, Mercari, Etsy, Amazon, or Shopify, knowing what business expenses you can write off is essential for keeping your business financially healthy. This applies to anyone in the resale industry, from thrift flippers to wholesale buyers.
In this post, we’ll cover a list of common tax write-offs resellers can use to lower their tax time burden, from inventory costs and shipping supplies to software subscriptions and home office expenses. Understanding these deductions can make tax season less stressful and help you reinvest more money into your business. Let’s dive in!
Why are Reseller Write-Offs Important?
Understanding business tax write-offs is crucial because every dollar you save on taxes is a dollar you can reinvest into your business. Many resellers, especially those just starting out a small business, don’t realize how much they’re leaving on the table by not tracking their deductible business expenses.
I remember working with a reseller who had been in business for over two years but had never deducted things like shipping costs, packaging supplies, or even the fees from online selling platforms. Once we went through their expenses, they were shocked at how much they could have saved. That experience reinforced just how important it is to not only keep good records but also to know what qualifies as a write-off. By understanding these business tax deductions, you can ensure you’re maximizing your profits and keeping more of your hard-earned money.
Examples/Tips/Ideas/Resources for Reseller Write-Offs
1. Shipping Costs
One of the biggest business expenses for resellers is shipping. Fortunately, many shipping-related costs are tax-deductible, including:
Shipping labels and scales
Boxes, poly mailers, bubble wrap, and tape
Printing costs for shipping labels
Since shipping is a fundamental part of any online reselling business, tracking these costs throughout the year can lead to significant savings at tax time.
2. Platform Fees
If you sell on platforms like eBay, Poshmark, Etsy, Amazon, or Mercari, you’re paying fees that can be deducted as business expenses. These may include:
Listing fees
Final value fees
Subscription fees for premium store options
Payment processing fees from PayPal or other payment processors
These costs add up over time, so keeping track of your monthly statements and deducting them appropriately can help lower your taxable income.
3. Inventory & Cost of Goods Sold (COGS)
The cost of purchasing items to resell—whether sourced from thrift stores, liquidation pallets, wholesale suppliers, or garage sales—can be deducted as part of your Cost of Goods Sold (COGS). This includes:
The purchase price of inventory
Storage fees for inventory
Supplies used to repair, clean, or improve products before selling
Accurate record-keeping is crucial for tracking COGS, so be sure to log every purchase and keep receipts when you get them. Also, keep in mind that there's a couple different ways resellers typically claim expenses for inventory purchases: accrual inventory method versus cash inventory method. For more on these two, check out this article: What is the difference between the cash inventory method and the accrual inventory method?
4. Home Office Expenses
If you run your reselling business from home, you may qualify for the home office deduction. This includes a portion of:
Rent or mortgage interest
Utilities like electricity, water, and internet
Office furniture and equipment
To qualify, your home office space must be used exclusively for business purposes. The IRS allows you to calculate this deduction based on square footage or actual expenses. For more information, see this article.
5. Mileage & Travel
If you drive to thrift stores, liquidation sales, flea markets, or the post office for business use, you can deduct business miles, travel, and vehicle expenses. This includes:
Mileage driven for business purposes (keep a mileage log)
Gas, tolls, and parking fees
Hotel stays and meals for business activities
The IRS sets a standard mileage deduction rate each year, so keeping detailed records can help maximize your tax deductions.
There are frequently a lot of questions surrounding business travel expenses, the following guide from the IRS helps to demystify this topic: Travel and Entertainment Expenses. Spoiler alert, most business meals only qualify for a 50% tax deduction.
6. Software & Subscriptions
Many resellers rely on various software and tools to run their business, and these costs are fully deductible. Some examples include:
Listing and inventory management tools (List Perfectly, Vendoo)
Bookkeeping software (My Reseller Genie, QuickBooks, Xero)
Market research tools (Keepa, Jungle Scout)
Cloud storage services for business files (Google Cloud, iCloud)
Whether you're automating listings, tracking expenses, or researching market trends, these software expenses can add up—so don’t forget to include them as write-offs!
7. Marketing & Advertising
Investing in marketing is essential for growing your business, and the costs associated with promoting your store or listings are tax-deductible. This includes:
Promoted listings on eBay, Etsy, or Amazon
Branding materials like business cards, thank-you stickers, or custom packaging
Even if you're running small-scale promotions, every bit counts when it comes to tax deductions.
8. Business Supplies
Running a resale business requires more than just inventory. You likely use various supplies daily, and these expenses are deductible, including:
Printers and ink
Label makers and barcode scanners
Office supplies (pens, notebooks, folders)
Poly mailers, bubble wrap, and tape
Keeping receipts and tracking your business supply purchases throughout the year ensures you claim every tax deduction possible.
9. Business Insurance
If you have business insurance, it’s a completely deductible expense. Whether you sell part-time or full-time, protecting your business with the right insurance can save you from unexpected financial losses. Common types of insurance for resellers include:
General liability insurance – Covers accidents, damages, or injuries related to your business.
Product liability insurance – Protects you if a product you sell causes harm or issues.
Business property insurance – Covers damage or theft of business-related equipment and inventory.
If you have an insurance policy to protect your resale business, don’t forget to deduct those premium payments!
10. Cell Phone & Internet Expenses
If you use your cell phone or internet for business purposes, you can deduct a portion of those expenses. As a reseller, these are essential tools for managing your business—whether you're listing items, conducting business calls, responding to customers, researching trends, or coordinating shipments.
What can you deduct?
A percentage of your cell phone bill (based on business use)
Internet service costs if used for listing, bookkeeping, or online sales
A second phone line or business-only phone plan (100% deductible)
How much can you write off?
If you use your phone or internet for both personal and business purposes, you can only deduct the business-related portion. For example, if 50% of your phone use is for your reselling business, you can deduct 50% of your monthly bill. Keeping a record of business-related usage can help justify your deduction in case of an audit.
11. Meals
If you grab a meal while conducting business, you may be able to deduct 50% of the cost. This includes meals during:
Business meetings with clients, vendors, or potential partners
Traveling for business purposes (e.g., sourcing trips, conferences, trade shows)
Meals while attending networking events or reseller meetups
What doesn't count?
Everyday meals or snacks you eat while working from home don’t qualify. The IRS only allows meal deductions when they’re directly related to business.
Conclusion
Reselling can be a highly profitable business, but to truly maximize your earnings, you need to take advantage of all the tax deductions available to you. By tracking and deducting expenses like shipping costs, platform fees, inventory purchases, home office expenses, business insurance, and even cell phone and internet usage, you can significantly reduce your taxable income and keep more money in your pocket.
The key to making the most of these deductions is good record-keeping. Keep digital or physical copies of receipts, track your mileage, categorize expenses properly, and don’t forget about overlooked deductions like business meals and insurance premiums. Using an accounting software like My Reseller Genie can be extremely helpful as you can track these deductions as well as your inventory and sales numbers, ensuring a much simpler tax-filing experience! If you’re unsure about specific deductions, consulting with a tax advisor can ensure you’re following IRS guidelines while maximizing your savings.
One great takeaway? Every dollar you save on taxes is a dollar you can reinvest into your business! Stay organized, track your expenses, and take advantage of every deduction possible—your future profits will thank you!
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