Your E-Commerce Selling Questions Answered

If you are currently operating an e-commerce business, you already know tax season is not just a “file this now and forget” situation. As 2026 just kicked off not too long ago, things are going to get more interesting as it will be more seller-friendly. 

This is due to updated tax breaks, expanded deductions that reward business habits, and clearer marketplace rules. These include the permanent 20% Qualified Business Income (QBI) deduction, the restoration of 100% bonus depreciation for qualifying assets, and an increased reporting threshold of the 1099-K Form.

Here is the great news. If you prepare to file your taxes now, it will be a smooth process, so you can relax and breathe easily when it is completed.

The first thing to know is that marketplace reporting is here to stay and will not go away anytime soon. E-commerce platforms like Shopify, Etsy, Amazon, and TikTok Shop are locked into third-party reporting. What does this mean? The IRS will have a clear picture of your gross sales before you even open your financial records. In doing so, it is all about maximizing deductions and keeping your records clean, not hiding them from the IRS.

If you are still using a spreadsheet to mix personal and business expenses, this is your sign to upgrade.

The tax breaks mentioned before heavily favor digital-first and small business operators. Key areas e-commerce sellers are benefiting from include improved depreciation options for expensive equipment like laptops, warehouse tools, cameras, and software, expanded home office flexibility for sellers who store inventory or run their entire fulfillment from home, health insurance and retirement savings for independent sellers, and R&D related deductions.

In other words, the more legitimate you treat your day-to-day business, the more the tax code works in your favor!

If you’re the sole business owner, you still get to claim the Qualified Business Income deduction. This means you can deduct up to 20% of your business income. Also note, if you make at least $1,000 in QBI, you will have a minimum deduction of at least $400.

What started phasing out for the last few years started to come back this year: the bonus depreciation. That means in 2025, if you bought gear for your shop, cameras, computers, warehouse shelves, or anything in that category, you could deduct 100% of those qualifying purchases. This will give you extra cash flow in your pocket when you need it most. 

The talk about taxes does not have to be anxiety-inducing for your mental health. With this year’s tax break changes working in your favor, you can save more, strategize smarter, and still enjoy your life and business outside of worrying about the tax filing deadline. Please don’t hesitate to contact our firm for guidance.