How do Amazon FBA sellers pay taxes?

Report net profit (sales minus cost of goods sold, Amazon fees, and expenses) on Schedule C. You owe 15.3% self-employment tax on 92.35% of net profit plus income tax. Inventory is deducted as cost of goods sold when items sell.

Will Amazon send me a 1099-K?

For tax year 2025, Amazon issues a 1099-K if you exceed $20,000 in sales AND 200 transactions. Regardless of whether you get one, you must report all your income.

What can Amazon FBA sellers deduct?

Cost of goods sold, Amazon FBA and referral fees, shipping to warehouses, product samples, software (inventory/repricing tools), a home office, and mileage. Track inventory carefully — it's deducted as COGS when sold, not when purchased.

How does inventory affect my FBA taxes?

You generally can't deduct the full cost of inventory the year you buy it — you deduct the cost of goods as they sell (cost of goods sold). Unsold inventory stays on your books until it sells, which affects your taxable profit each year.

Self-Employment Tax Calculator for Amazon FBA Sellers (2025)

How much tax does a self-employed amazon fba seller pay? A amazon fba seller earning $80,000 with about $55,000 in business expenses owes roughly $4,281 in total federal tax for 2025 — a 15.3% self-employment tax plus federal income tax — or about $1,070 per quarter. A common rule of thumb is to set aside 25–30% of net income for taxes. Use the calculator below for your own numbers and state.

Selling on Amazon makes you self-employed. For tax year 2025, Amazon issues a 1099-K only if you exceed $20,000 in payments AND 200 transactions — but you must report all income regardless of whether you get the form. This calculator estimates your self-employment tax and quarterly payments, and highlights the cost-of-goods, FBA fees, and advertising deductions sellers miss.

Annual gross income (before expenses)

Total business expenses (incl. deductions below)

State

This tool provides estimates for educational purposes only and is not tax advice. Tax rules change; figures are based on 2025 federal rules. Consult a tax professional for your specific situation.

Deductions Amazon FBA Sellers often miss

FBA profits vary widely. Your cost of goods sold and Amazon fees are large — profit, not gross revenue, is what's taxed. Track inventory carefully.

Cost of goods sold: What you pay for inventory directly reduces taxable profit — the single most important number to track.
Amazon FBA & referral fees: Fulfillment fees, referral fees, storage fees, and Amazon Ads spend are all deductible.
Shipping to Amazon: Inbound shipping and prep costs to get inventory into FBA warehouses.
Software & tools: Product research (Jungle Scout, Helium 10), repricers, and accounting software.
Samples & product photography: Product samples, photography, and listing optimization costs.

Common tax mistakes for amazon fba sellers

Paying tax on gross sales instead of profit after COGS and fees.
Not tracking inventory and cost of goods sold accurately.
Forgetting the many Amazon fee types as deductions.
Ignoring quarterly payments and sales tax obligations.

How self-employment tax works

As a self-employed amazon fba seller, you pay a 15.3% self-employment tax (12.4% Social Security + 2.9% Medicare) on 92.35% of your net profit, plus federal and state income tax. A common rule of thumb is to set aside 25–30% of your net income for taxes.

Quarterly estimated tax deadlines (2025)

If you expect to owe $1,000 or more, the IRS requires quarterly estimated payments. For 2025 income the deadlines are: April 15, 2025; June 16, 2025; September 15, 2025; and January 15, 2026. Missing them can trigger underpayment penalties. The calculator above estimates your quarterly amount.

Frequently asked questions

How do Amazon FBA sellers pay taxes?: Report net profit (sales minus cost of goods sold, Amazon fees, and expenses) on Schedule C. You owe 15.3% self-employment tax on 92.35% of net profit plus income tax. Inventory is deducted as cost of goods sold when items sell.
Will Amazon send me a 1099-K?: For tax year 2025, Amazon issues a 1099-K if you exceed $20,000 in sales AND 200 transactions. Regardless of whether you get one, you must report all your income.
What can Amazon FBA sellers deduct?: Cost of goods sold, Amazon FBA and referral fees, shipping to warehouses, product samples, software (inventory/repricing tools), a home office, and mileage. Track inventory carefully — it's deducted as COGS when sold, not when purchased.
How does inventory affect my FBA taxes?: You generally can't deduct the full cost of inventory the year you buy it — you deduct the cost of goods as they sell (cost of goods sold). Unsold inventory stays on your books until it sells, which affects your taxable profit each year.