How to Run "End of the Year" Inventory & Sales Reports for Tax Purposes - Full-Time FBA (2024)

*Updated for 2024

I admit the topic of “end of year reports” is not all that exciting, but it’s very necessary… in fact, if you don’t do this right it could have some negative impacts on your business.

No matter if you sell on Amazon as a serious income stream or as an occasional hobby, you’re still required to report your income to the IRS. It’s important to know that thereare several reports you should be sure to send to your CPA (or whoever is doing your taxes).

Before we go any further I want you to know that I am not a tax specialist or giving you any tax advice.I highlyrecommend hiring a local CPA who is knowledgeable of online sales and all the tax implications for your state. Today, I’m only showing you how to get the reports that you need to add to all of your other 2023 tax documents.

If you’re an InventoryLab user, I have very good news for you. The process of getting most of these reports and numbers is incredibly easy. On the other hand, if you’re not an InventoryLab user, while some of the reports in Seller Central are easy to run, there are other reports and numbers you need to calculate that will be very time consuming to do.

Let’s do this!

The most important information you’ll need to have on hand to give your CPA are the following:

1. 1099K from Amazon
2. Year End Sales Report
3. Year End Expense Report
4. Year End Cost of Goods Sold
5. Year End Inventory Valuation
6. Vehicle Expense Report

I’ll break down exactly how to run the right reports and how to access these numbers in the sections that follow.

1099K from Amazon

This is an easy report to find and print out. Your 1099K is the report of your gross sales revenue for the year. You’ll be able to download this report directly from Amazon if you’ve grossed over $20,000 in unadjusted sales and 200 or more transactions during the year OR if you’ve had one transaction in 2023 for over $600 (source). Amazon will email you a link on how to access this form sometime in mid-January (usually more toward the end of the month). You can get this report from the Amazon email they send you and from your Amazon Tax Document Library. The report will be ready for download from Amazon sometime after January 1, but before January 31. If you didn’t qualify for this report, then you’ll need to find this information by creating a Year End Sales Report.

When you look at your 1099K from Amazon, you might freak out a little because the number Amazon gives you might look like a HUGE number. That’s because the 1099K tells you your gross sales numbers without factoring in things like Amazon fees, returns, and other expenses. The gross sales number is important to know, but it’s not the number you’ll want to report as an accurate reflection of your actual profits. That’s why we’re running these other reports as well.

If you didn’t qualify to get a 1099K from Amazon (grossed under $20,000 in unadjusted sales and under 200 or more transactions), that doesn’t mean you’re exempt from reporting your income. It just means you’ll have to use the Year End Sales Report (see below) in order to get the data you need to properly report your income.

Year End Sales Report

This report gives you a lot of information about your Amazon sales numbers including your FBA sales, non-FBA sales, total Amazon expenses, and total refunds for the year.

If you didn’t meet the $20,000 sales and 200 transactions qualification to get a 1099K, you still need to report your numbers to the IRS. You can do that by running some seller reports in Seller Central. Here’s how:

1. Log in to Seller Central, click the three line icon in the top left corner of the screen, hover over the PAYMENTS header, and click on the REPORTS REPOSITORY option.
2. Choose or enter the following options to run the correct report:
   Account Type: All (Unified Reports)
   Report Type: Summary
   Reporting Date Range: Custom Date Range
   From: Enter from 01/01 of the year to 12/31 of the same year
   For 2023, it should look like this:
   
3. Click the REQUEST REPORT button.
4. It will take a few seconds to generate the report. Near the bottom of the page it will let you know that the report is “in progress” and will give you an option to refresh the page to see if the report is complete. Once the report is ready, the “in progress” status will change to a yellow download button.
   
5. Click on the yellow download button and the report will be saved to your computer.

NOTE: If you do the above steps before December 31, then Amazon will schedule this report to be run first thing January 1. Just remember to come back to this report page to download this report. It will be there waiting for you to download.

If you run this report after January 1, then Amazon will just need a few moments to create this report. You can refresh the link on the report after a few minutes, and you should be able to download it at that moment.

This Year End Sales Report PDF will give you a one-page summary of your income (Amazon sales), expenses (Amazon fees), refunds, sales tax, and bank transfers. This is a PDF that your CPA will want to have in order to best do your taxes.

But, of course, you have had a lot of other expenses (inventory, boxes, office supplies, sourcing apps, program subscriptions, etc.) other than Amazon fees, right? So how can we get those expenses? One way is to create a Year End Expense Report.

Year End Expense Report

Hopefully you’ve been keeping track of all your expenses for the year (as well as all of the receipts, right?). There are many different ways people track their expenses. Some people use a spreadsheet, some use software solutions like InventoryLab, and some even give their CPA or bookkeeper access to their business checking account to track their expenses.

If you use a spreadsheet, take some time to double check that all your numbers are recorded correctly. Most people have these type of expenses: inventory, office supplies, shipping supplies, physical tools, computer programs, business related subscriptions, training materials (like this course), contract labor, and anything else legitimately connected with a business purpose.

If you use InventoryLab and have tracked all of your expenses there throughout the year, then you can easily run a Year End Expense Report. Here’s how:

1. Log in to InventoryLab, hover over the ACCOUNTING tab and click the OTHER EXPENSES report.
2. Then click on the ADVANCED SEARCH button.
3. Search the EXPENSE DATE from 01/01 to 012/31 of the year you’re wanting to run the report for and click SEARCH.

At the bottom of the screen, you’ll see your total expenses for the time period you entered. You can use this number to give to your CPA. You can also click on the EXPORT button and have a spreadsheet version of the full report.

Year End Cost of Goods Sold

This is the number that totals up the cost of all the items you sold for the year. The easiest way to get this number is to run a quick report within InventoryLab. The report only takes a moment to run and is super easy.

If you are an InventoryLab user, here’s how to get your year-end cost of goods sold:

1. Log in to InventoryLab, hover over REPORTS, and click on PROFIT & LOSS.
2. Click on the YEARLY report and choose the calendar year you want to run.
3. Click the VIEW button.
4. Click EXPORT so you’ll have a digital copy of this report.

On the report, you can see the line item of Cost of Goods Sold. Look at the yearly total and you have your Cost of Goods Sold number for the year (provided you entered in your cost of goods when listing your inventory into InventoryLab).

On the other hand, if you’re not an InventoryLab user, this process is somewhat harder to calculate, but not impossible. You can use an IRS form 1040 – Schedule C to help you figure out your year-end Cost of Goods Sold. Below is an example from 2020 on how to calculate this number:

As always, do your due diligence to make sure you’re using the correct year’s paperwork when calculating this number. Most importantly, talk this over with a local CPA to make sure you’re doing this correctly.

Inventory Valuation Report

The Inventory Valuation Report will tell you the current value of your inventory that you currently have in stock at Amazon fulfillment centers (for FBA sellers). Just know that this report needs to be run after January 1 of the new year. If you run it before, it will not work correctly.

If you’re using InventoryLab, this report is super easy to run. Here’s how:

1. Log in to InventoryLab, hover over REPORTS, and click on INVENTORY VALUATION.
2. Enter the date 12/31 of the year you want to run this report for and click VIEW.
3. To get a digital copy, click on the EXPORT button.

Not an InventoryLab user? To calculate your end of year Inventory Valuation you’ll first need to run a FBA Inventory report in Seller Central as soon after the new year as possible. If you do the above steps before December 31, then the report will not be accurate. This will give you a list of inventory items in stock at the end of December (i.e. the end of the year) that you can use to calculate the value of your year-end inventory.

Again, you want to run this report as soon after the new year as possible. I recommend setting a reminder on your phone or computer to remind you to do this on January 1st or as soon as possible after January 1. The closer it is to January 1st, the more accurate the report will be. If you’re just now doing this and it’s February or beyond, still complete this report ASAP as it will be the best you can do at this point.

Here’s how to run this report without InventoryLab:

1. Log in to Seller Central, click the three line icon in the top left corner of the screen, hover over the REPORTS header, and click on the FULFILLMENT option.
2. In the INVENTORY section on the left, click SHOW MORE.
3. Click FBA INVENTORY in the INVENTORY section. Do not confuse this with the AMAZON FULFILLED INVENTORY option.
4. Click on the REQUEST .CSV DOWNLOAD button.
5. It might take a few minutes, but the report will run and will eventually give you the option to download the report.

Again, if you do the above steps before December 31, then the report will not be accurate.

When you run this report after January 1, then Amazon usually will just need a few moments to create this report. You can refresh the link on the report after a few minutes, and then you should be able to download it at that moment. If you ever get a message that says “No Data Available,” then don’t worry. Amazon may be busy and need a few days to create this report. Come back later and see if the report has been completed.

Now that you have the file, you can open it up in a spreadsheet document (like Excel or Google Sheets). The important info you’re looking for is in the “Available” column. The numbers you see will be the in-stock quantity at Amazon as of when you ran the report (this is why we want to run it as close to after the new year as possible). Within the spreadsheet program, you can sort the “Available” column from bigger numbers to smaller numbers, and then just delete any line that has a quantity number of zero. There is no need to report for the inventory you don’t have in stock for your year end inventory valuation. Now you have a spreadsheet showing you the in-stock stock levels for the end of the year.

Here is the hard and tedious part of this process. Now you’ll need to go line by line and figure out the buy cost of each of these items you have in stock. You probably will need to reference your receipts to get the correct buy costs for these items. This takes a ton of time (depending on the size of your inventory) but is necessary to report your numbers correctly. Once you are finished, you’ll have your year end FBA inventory valuation.

Of course, that’s just your year-end FBA inventory. Other inventory that you’ll need to add to this valuation includes any items you’re Merchant Fulfilling, inventory you’ve ordered that has not been delivered to your home/prep center yet, inventory that is on its way to Amazon but not checked in, and any inventory you have sitting around your house/office that has not been sent to Amazon yet as of midnight of January 1.

Again, the Inventory Valuation report is super quick and easy to do if you’ve used InventoryLab in the past year, so if you’re looking for a way to make this easier for next year, then I highly recommend signing up for a free trial of InventoryLab. It’s easily in my top 3 tools to use as a successful Amazon FBA seller. Plus starting the year using InventoryLab means zero catch up work to do as the year progresses.

Vehicle Expense Report

All of your business-related miles are tax deductible. These drives could include garage saling, thrifting, retail arbitrage, trips to the store to buy business-related supplies, trips to drop off shipments at UPS, and any other business-related driving. All of these miles are tax deductible.

Whether you keep track of your miles in a notebook, in a spreadsheet, or by using the MileIQ app (your miles tracked automatically – highly recommend), be sure to get your mileage for the year to your CPA so they can deduct those miles from your taxes. If you’re not a MileIQ user, here is our review of MileIQ.

Eventually, you’ll have all of the numbers and reports you need to give to your CPA:

1. 1099K from Amazon
2. Year End Sales Report
3. Year End Expense Report
4. Year End Cost of Goods Sold
5. Year End Inventory Valuation
6. Vehicle Expense Report

Get all of these reports to your CPA ASAP. Tax day for 2024 is April 15, but that day will come very quickly if you don’t gather up all these numbers and reports soon.

You really don’t want to be late on getting the tax process started. Again, if you don’t have a CPA, I highly recommend getting one as soon as possible. It might seem costly, but you want to be sure your numbers are right, and you want a professional to do the work that would eat up way too much of your time if you did it yourself.

Again, I recommend using InventoryLab to keep track of all your business expenses like cost of goods, mileage, supplies, etc. If you don’t have all of your expenses’ data stored in one place, I highly recommend using InventoryLab – especially at the start of a new year so you can have all of your financial data in one place from the start of the year. Get a free month of InventoryLab by clicking here.

*Post updated for 2024

The Reseller’s Guide to a Year in FBA

(Updated Each Year)

Make this new year your Best Amazon Sales Year Ever!

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Ok, the year is almost over. What other things are you doing during the last week of the year in order to prepare for next year? I’d love to hear what you’re up to this week!