E-Commerce and Amazon Seller CPA in Dallas, Texas
Selling online sounds simple until tax season arrives. If you run an e-commerce business or sell through Amazon FBA in the Dallas-Fort Worth area, you already know the headaches: sales tax obligations in dozens of states, inventory accounting that never quite matches your platform reports, and a constant stream of fees that are difficult to categorize. These are not problems a general-purpose CPA encounters every day, and that gap in experience can cost you thousands in missed deductions or surprise tax bills.
Accounting Challenges Unique to E-Commerce and Amazon Sellers
E-commerce businesses face a combination of tax and accounting issues that most brick-and-mortar businesses never deal with. Here are the specific challenges we help Dallas-area sellers solve every day.
Multistate Sales Tax Nexus and Compliance
Since the Supreme Court’s 2018 South Dakota v. Wayfair decision, states can require you to collect sales tax even if you have no physical presence there. Most states have set their economic nexus thresholds at $100,000 in sales or 200 transactions per year, but the rules vary state by state. If you store inventory in an Amazon FBA warehouse in, say, California or New Jersey, you may also have physical nexus in those states. Many sellers discover they owe back taxes in states they never realized they had obligations in.
Inventory Valuation and Cost of Goods Sold
Getting your cost of goods sold (COGS) right is one of the most consequential accounting tasks for any product-based business. You need to track landed costs, the product price, shipping from suppliers, customs duties if you import, and prep or labeling fees, not just the price you paid your manufacturer. Choosing the wrong inventory method (FIFO vs. weighted average) or failing to account for damaged and returned goods can distort your profit margins and your tax liability significantly.
Reconciling Marketplace Payouts to Actual Revenue
Amazon, Shopify, Walmart Marketplace, and Etsy all calculate payouts differently. Amazon’s Settlement Reports, for example, bundle sales, refunds, FBA fees, advertising charges, and storage fees into a single net deposit. If you simply record those deposits as revenue, your books will be wrong. Proper accounting requires disaggregating each component so your gross revenue, fees, and net income are all reported accurately to the IRS.
Marketplace Facilitator Rules and Double Taxation Risk
Texas and more than 45 other states have marketplace facilitator laws that require Amazon and similar platforms to collect and remit sales tax on your behalf. That sounds helpful, but it creates confusion: sellers sometimes collect tax on their own Shopify store while Amazon also collects on marketplace orders, leading to potential double collection. And if you sell through channels where no facilitator collects, your own website, wholesale, or a smaller marketplace, you are still responsible for collecting and remitting tax yourself.
Tracking Platform Fees, Advertising, and Returns
Between Amazon FBA fees, referral fees, storage fees, PPC advertising spend, return shipping costs, and promotional credits, a typical Amazon seller has dozens of expense categories that need to be tracked separately. Lumping these together means you lose visibility into your real margins per product, and you risk underreporting deductible expenses on your tax return.
Tax Strategies for E-Commerce and Amazon Sellers
The right tax strategy can save an e-commerce seller thousands of dollars a year. Here are specific approaches we use for our DFW-based e-commerce clients.
S-Corp Election to Reduce Self-Employment Tax
If your e-commerce business nets more than roughly $50,000 to $60,000 per year in profit, electing S-Corp status can significantly reduce your self-employment tax burden. Instead of paying the 15.3% self-employment tax on your entire net income, you pay yourself a reasonable salary (subject to payroll taxes) and take the remaining profit as a distribution, which is not subject to the 15.3% SE tax. For a seller netting $120,000, this election can save $8,000 to $12,000 annually. We help Dallas-area sellers determine whether an S-Corp election makes sense and handle the LLC formation and IRS Form 2553 filing.
Section 199A Qualified Business Income Deduction
As a pass-through business owner, you may be eligible for the Section 199A deduction, which allows you to deduct up to 20% of your qualified business income. For a sole proprietor or S-Corp owner with $100,000 in qualified business income, that is a potential $20,000 deduction, directly reducing your taxable income. The rules have income phase-out thresholds (for 2026, these begin at $191,950 for single filers and $383,900 for married filing jointly), and proper entity structuring and income planning can help you stay within the full deduction range.
Home Office and Dedicated Workspace Deductions
Many e-commerce sellers run their business from a home office, prep area, or garage used for storing and shipping inventory. If you use a dedicated space exclusively and regularly for your business, you can deduct the proportional share of rent or mortgage interest, utilities, insurance, and repairs. The simplified method allows $5 per square foot up to 300 square feet ($1,500 maximum), but the actual expense method often yields a larger deduction, especially if a significant portion of your home is used for inventory storage.
Full Deduction of Inventory-Related Costs
Beyond the purchase price of your products, you can include shipping from suppliers, import duties, customs brokerage fees, product inspection costs, packaging materials, and prep center fees in your COGS. Many sellers miss these line items because they think of COGS as just the cost on the supplier invoice. Capturing every legitimate landed cost reduces your taxable gross profit dollar for dollar.
Depreciation of Equipment and Software
Cameras, lighting, computers, label printers, shelving, and even software subscriptions used for your business are deductible. Under Section 179, you can expense qualifying equipment purchases in the year they are placed in service, up to $1,250,000 for 2026, rather than depreciating them over multiple years. For most e-commerce sellers, this means an immediate deduction for any equipment you buy.
Retirement Plan Contributions for Tax Deferral
Opening a Solo 401(k) or SEP-IRA allows you to defer a substantial portion of your income. A Solo 401(k) allows employee deferrals of up to $23,500 in 2026 (plus $7,500 catch-up if you are 50 or older), plus employer profit-sharing contributions of up to 25% of compensation. This is one of the most powerful tax reduction strategies available to self-employed sellers, and we help our clients set up the right plan for their situation.
Our Accounting Services for E-Commerce and Amazon Sellers
We provide a full suite of services tailored to how online sellers actually operate, not generic small business accounting with an e-commerce label on it.
- Multistate Sales Tax Registration, Filing, and Compliance, We determine where you have nexus, register your business in the required states, and handle ongoing sales tax filings so you stay compliant without spending your weekends on state tax portals.
- Amazon, Shopify, and Marketplace Reconciliation, We reconcile your marketplace settlement reports, payment processor deposits, and bank accounts monthly so your revenue, fees, and COGS are all categorized correctly. Our bookkeeping services are built to handle the complexity of multichannel selling.
- S-Corp and LLC Entity Structuring, We advise on the right entity structure based on your profit level and growth plans, then handle the formation, IRS elections, and ongoing compliance so you are not overpaying on self-employment tax.
- Inventory Accounting and COGS Tracking, We set up systems to track your full landed cost per product, manage your inventory valuation method, and make sure your year-end inventory counts tie out to your financial statements.
- Annual Business and Individual Tax Preparation, From Schedule C sole proprietor returns to S-Corp (Form 1120S) and partnership (Form 1065) filings, we prepare your business and personal tax returns with the e-commerce-specific deductions most CPAs overlook. Business returns start at $750.
- Texas Franchise Tax and Annual Compliance, Every Texas LLC and corporation must file a franchise tax report and public information report annually with the Texas Comptroller. We handle these filings so you never miss a deadline and never risk losing your entity’s good standing.
Why E-Commerce and Amazon Sellers in Dallas Choose AG Freideman
- Al handles your account personally. When you call AG Freideman, you talk to Al, a licensed CPA with over 30 years of experience. Your return is not prepared by a seasonal associate or handed off to someone who has never reconciled an Amazon settlement report. This personal attention is why we have 52 five-star Google reviews with zero negative reviews.
- We understand marketplace accounting. We know the difference between an FBA referral fee and a storage fee, and we know how to pull the data from Seller Central, Shopify, and other platforms so your books reflect reality. You do not have to teach your CPA how your business works.
- Virtual service across all of DFW and beyond. Our office is on Preston Road in North Dallas, and we welcome in-person meetings. But most of our e-commerce clients work with us entirely virtually, uploading documents securely, meeting over video, and communicating by phone or email. Whether you are in Richardson, Allen, Prosper, Celina, or anywhere in Texas, we serve you the same way.
- Transparent pricing with no surprises. We quote a price before we start, and that is the price you pay. Individual returns start at $450, business returns at $750, and monthly bookkeeping at $300 per month. You can see our full pricing page before you ever pick up the phone.
Common Questions from E-Commerce and Amazon Sellers
Do I need to collect sales tax in states where Amazon stores my FBA inventory?
In most cases, Amazon is the marketplace facilitator and collects and remits sales tax on your behalf for orders placed through their platform. However, storing inventory in an Amazon warehouse creates physical nexus in that state, which may require you to register and file returns, especially for sales made through your own website or other non-facilitator channels. We review your FBA inventory placement reports and advise on exactly where you need to register.
When should an Amazon seller switch from a sole proprietorship to an S-Corp?
The general benchmark is when your net business profit consistently exceeds $50,000 to $60,000 per year. At that level, the self-employment tax savings from paying yourself a reasonable salary and taking the rest as distributions typically outweigh the added costs of payroll processing and a more complex tax return. We run the numbers for each client to make sure the election actually saves money in their specific situation.
How do I handle returns and refunds in my accounting?
Returns should reduce your gross revenue in the period they occur, and any restocking or return shipping fees should be tracked as separate expenses. If the returned product goes back into sellable inventory, your COGS does not change. If it is unsellable, you write off the cost of that inventory. We set up your bookkeeping system to categorize returns correctly so your profit margins are accurate.
What records should I keep for my e-commerce business?
At a minimum, you need marketplace settlement reports, payment processor statements (Stripe, PayPal, etc.), supplier invoices, shipping receipts, advertising spend reports, and bank and credit card statements. If you import products, keep your customs entry documents and duty receipts. The IRS requires you to keep business records for at least three years from the filing date, but we recommend keeping them for at least seven years.
Does Texas charge sales tax on items I sell online?
Texas has a 6.25% state sales tax rate, plus up to 2% in local taxes, for a maximum combined rate of 8.25%. If you sell taxable goods to Texas customers through your own website (not through a marketplace facilitator), you are responsible for collecting and remitting Texas sales tax. Sales through Amazon and other registered marketplace facilitators are collected by the platform, but you still need to ensure your own direct sales channels are compliant.
Ready to Work with a CPA Who Understands E-Commerce and Amazon Sellers?
If you are tired of explaining what FBA fees are to your accountant, or worried you have sales tax exposure in states you have never thought about, let’s talk. Al Freideman has spent over 30 years helping Dallas-Fort Worth business owners get their taxes and accounting right, and he will handle your account personally from the first conversation through every filing.
Your free consultation is a straightforward conversation about your business, your current setup, and where we can help. No obligation, no pressure, no sales pitch, just an honest assessment from a licensed CPA who has seen it all. We meet virtually or in person at our Preston Road office in North Dallas.
Book your free consultation online or call Al directly at (972) 893-3481. You can also read what our clients have to say, 52 five-star reviews and counting.
"I had worked with the same accountant for more than 10 years, so finding a new one was a significant decision. While my previous accountant did a great job, they were located out of state, and I wanted someone local…"
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