Guide · 7 min read
Amazon's settlement deposit isn't your revenue — it's revenue minus a dozen fees. Here's how to reconcile FBA payouts so you only pay tax on real profit.
Every 2 weeks Amazon deposits a number. That number bundles sales, refunds, reimbursements, FBA fees, referral fees, storage, advertising, and chargebacks. If you log only the deposit, you'll miss tens of thousands of dollars in deductions — and have no idea which SKUs actually make money.
Open a business checking account and route every Amazon settlement into it. Add a business credit card for inventory purchases — easier to track and earns cashback on COGS.
Seller Central → Reports → Payments → Date Range Reports → Summary. CSV format. It breaks every settlement into Sales, Refunds, FBA Fees, Selling Fees, Advertising, and Other.
Log every PO: per-unit cost, freight, customs, prep. When a unit sells, that cost becomes COGS. Without this you can't tell profitable SKUs from losers.
Referral fees, FBA fulfillment, monthly storage, long-term storage, PPC, removal fees, and the $39.99/mo Professional plan are all separate deductible categories. Don't lump them as 'Amazon fees'.
Move ~25–30% of net profit to a tax savings account. Amazon doesn't withhold. The IRS expects quarterly payments — April 15, June 15, September 15, January 15.
SnapBooks splits every settlement into sales, fees, and reimbursements so you see real margin.
Start freeYes. Amazon issues a 1099-K once you cross the federal threshold ($2,500 in 2025, $600 in 2026+). The form reports gross sales, including buyer-paid shipping and tax — none of your expenses. You're responsible for deducting fees, COGS, and FBA costs.
All of them. Referral fees (8–15% depending on category), fulfillment fees per unit, monthly storage, long-term storage, removal/disposal, return processing, advertising (PPC), Brand Registry costs, and the Professional Seller subscription are all 100% business deductions.
Amazon pays in 2-week settlements that bundle sales, refunds, fees, and reimbursements into one deposit. Download the Date Range Summary from Seller Central → Payments → Reports Repository at month-end and split each settlement into its components. A bookkeeping tool that imports the report saves hours.
Treating Amazon's deposit as revenue. The deposit is net of dozens of fees you can deduct — but only if you record the gross sale and the fees separately. Skip this and you'll either overpay tax or get a nasty CP2000 letter from the IRS.
Most small-to-mid sellers use cash basis (simpler). Once inventory at year-end exceeds $1M average for the prior 3 years, the IRS requires accrual. If you're holding $20k+ in FBA inventory year-round, talk to a CPA about whether accrual would change your tax bill.