United States · Resellers · Checklist
Reseller tax deductions and COGS checklist.
The costs that reduce a reseller's taxable profit, where each one lives on Schedule C, and the records that support it.
Resellers are taxed on profit, so every supported business cost matters: the items you sold (cost of goods sold), platform fees, shipping, supplies, mileage at the IRS rate of 72.5 cents per mile for 2026, storage, and sometimes a home office. Keep records for each; the IRS asks for them, not the calculator.
The checklist
Publication 334 covers business income and expenses for sole proprietors. Its business expense headings include car and truck expenses, depreciation, insurance, interest, rent, taxes, travel and meals, and business use of your home, plus a section on figuring cost of goods sold on Schedule C lines 35 through 42. Use the list below as a prompt for gathering records, then check each category against the publication.
| Cost | Typical records | Where it fits |
|---|---|---|
| Items you bought and sold | Purchase receipts, repair and cleaning costs, count of items sold and unsold at year end | Cost of goods sold, Schedule C lines 35 to 42 |
| Platform and payment fees | Seller fee reports and monthly statements | Business expense |
| Shipping labels and postage | Carrier and label history | Business expense |
| Packing supplies | Receipts for boxes, tape, mailers | Business expense |
| Business mileage | Dated log: date, place, purpose, miles | Car and truck expenses, 72.5 cents per mile for 2026 (IRS Notice 2026-10) |
| Storage space or shelving | Rental agreement or invoices | Rent expense |
| Software and subscriptions | Invoices | Business expense |
| Home office | Area, expenses, exclusive use records | See Publication 587; not assumed here |
Inventory and cost of goods sold
Cost of goods sold is what you paid for the items you actually sold in the year, plus costs to get them ready for sale. Inventory still on your shelf at year end is generally not yet a cost for that year, so keep a count. The Publication 334 section for Schedule C lines 35 through 42 is where the IRS explains how to figure it. We retrieved headings, not the whole text, so read that section before relying on any small-business exception.
Mileage: the rate can change
The IRS announced 72.5 cents per mile for business use beginning January 1, 2026 (Notice 2026-10), and Publication 334 for 2026 repeats it. The rate is an editable input in the calculator because the IRS can change it, and you must keep a log to claim it.
Worked example with an assumed year
Take the example year in the calculator: revenue $28,800.00, fees $4,440.00, labels $4,200.00, supplies $300.00, items sold $7,200.00, 400 miles at 72.5 cents = $290.00, other costs $200.00. Together these leave net profit of $12,170.00, and the cost lines make up 57.7% of revenue in this assumption. Your own mix will be different.
What this page does not cover
- Hobby versus business rules, depreciation, the qualified business income deduction and state deductions.
- Whether a specific purchase qualifies. Ask a preparer for unusual items.
- Receipts you do not have. The calculator cannot create a deduction you cannot support.
Next: turn profit into monthly set-asides.
Sources (retrieved October 2026)
- IRS Publication 334, Tax Guide for Small Business
- IRS news release: 2026 business mileage rate 72.5 cents (Notice 2026-10)
- IRS Publication 587, Business Use of Your Home
- IRS: Form 1099-K FAQs, general information
- IRS Schedule SE (Form 1040) instructions
Cite this page: TNAADO Tools, "Reseller Tax Deductions and COGS Checklist," tools.tnaado.ca/calculators/business/reseller-tax-calculator/reseller-tax-deductions-cogs-checklist/, checked October 19, 2026.
Frequently asked questions
What can resellers deduct?
Ordinary business costs such as the cost of items sold, platform fees, shipping, supplies, mileage, storage and software can reduce net profit on Schedule C, if you can support them with records. Publication 334 lists the categories; confirm each for your situation.
What is the 2026 business mileage rate?
The IRS set it at 72.5 cents per mile starting January 1, 2026 (Notice 2026-10). Keep a log of dates, places, purposes and miles.
Is unsold inventory deductible this year?
Generally cost of goods sold covers items sold in the year. Read the Publication 334 section for Schedule C lines 35 through 42 and keep a year-end count.
Can I deduct my home office as a reseller?
Possibly if you meet the rules in Publication 587. This page does not apply them or put any amount in the calculator.
Do I need receipts?
Yes. The IRS asks for records that support what you report. A calculator figure is not a record.
Not tax advice
This page is general information built from the IRS and platform sources listed above. It is not tax, legal or accounting advice and it does not know your situation. Results vary: every figure comes from the assumptions you enter or the labelled example, not from a prediction of what you will earn. Confirm anything that matters with the IRS instructions, your state revenue department or a tax professional. A Canadian version is not covered here.