📚The Ultimate Guide: Setting up QuickBooks for Amazon sellers

Bookkeeping is one of the most critical aspects of doing business on Amazon. As such, it is essential to use an accounting system (QuickBooks) and properly set up your account. Below is a guide to Setting up QuickBooks for Amazon Sellers the correct way.

Getting Started with QuickBooks

The first step of setting up QuickBooks for Amazon is signing up for a QuickBooks account.

QuickBooks has several different plans on offer, but Essentials is your best bet. Enter all the necessary information and proceed to your account dashboard.

Navigating QuickBooks

Now that you’ve taken the first steps to setting up QuickBooks, we are going to get started with the interface.

The service has three main menus you should understand, although there are several different paths to the same destination, as is the case with anything like this.

Create Menu

The create menu looks like a “plus” sign and is in the top right.

The create menu contains a lot of the day to day operations of a business. Here is where you write journal entries, enter expenses, write checks, and make deposits.

Preference Menu

The preference menu, also in the top right, looks like a "gear".

Here you can find your preferences and manage the reconcile feature of QuickBooks.

The gear section is also where you can find the menu to add some other users and other things that you won’t be using too much, but it’s always good to know where these things are if you need them.

Navigation Menu

You should also get acquainted with the left-hand column menu. This menu is the navigation menu.

From the navigation menu you can find all the other pages you can access. Each link goes to a different page except for Transactions, which opens up to reveal additional options.

From the navigation menu, take a look at the banking page.

It’s from the banking dashboard that you can find all of your incoming banking and credit card transactions. The reports page is where you can find all of the reports about the fruits of your labor and see what your hard work has earned you.

You can take a look through the other menu options too.

You will likely build up quite the list of vendors in your time as an Amazon seller. The customer's list is mostly going to be Amazon. They won’t be purchasing from you directly, but they do provide you with the income from your sales, and profit comes from customers. You may also get money from Shopify, eBay, or your proprietary storefront.

You don’t need to add details about the individuals who order from you into QuickBooks. This can quickly become thousands of names, most of which will only ever be seen once.

There’s no reason to track them all. If you were interested in individual customer information, then you can get it from Amazon (or the storefront you use), so there’s no reason to make another note of it when setting up QuickBooks.

Setting up QuickBooks Preferences

There are several options you can play around within the preferences menu, but most of them aren’t related to your business.

The preferences can be found by clicking on the gear icon and opening up the menu. From there, click on Account and Settings to be taken to this page;

The Company section is where you can fill out the critical information about your company including contact information and a logo – should you have one. Don’t worry if you don’t have one though or don't want to hassle with uploading.

From the company section, you can also choose the type of business you are managing (Sole Prop, S Corp, LLC, etc.). See our Guide to Choose a Legal Entity for Amazon Sellers.

Finally, take a look at the marketing preferences section. Here is where you can choose whether or not you want to receive emails, postcards, and the like from Intuit – the company behind QuickBooks.

There’s nothing in Sales, Expenses, or Payments that you need to worry about too much. So let’s skip ahead and look at the Advanced menu to the left of this section.

When you open up the Advanced menu, make sure of the following

• The fiscal year and tax year begins in January (unless it doesn’t work for you, but this is rare).
• Accrual rather than Cash is selected for the accounting method.
• Everything else in the preferences menu can be left where it is for now.

Click on the Done button at the bottom of the screen to save these changes.

Setting up QuickBooks Chart of Accounts

The chart of accounts (aka COA) section can be considered the foundation of your accounting.

The goal of the COA is that you need to make it as detailed as possible to get high-quality information from it. You want to make sure that the data is valuable or all it’ll do is make it take longer to do your books.

As you might have guessed, there’s no such thing as a “one size fits all” solution for a chart of accounts, no matter how much people like to claim otherwise.

I’ll provide you with a basic COA that you can use for an Amazon business, but don’t to add to it as you grow.

We always recommend keeping the following simple concepts in mind when adding accounts:

• Try to keep your COA structured and organized. The messier the chart of accounts get, the more likely there will be errors and other problems to account for.
• Keep it accurate from the start!

Below is a list of accounts that you may want to put in your COA. QuickBooks adds some accounts by default, but some you may need to add manually.

You may want to deactivate other accounts QuickBooks automatically adds to keep it looking clean. So, here’s the list of accounts:

Manually Adding to your QuickBooks Chart of Accounts

To manually add accounts, go to the transactions menu. This shows all of your existing accounts. If there are any missing accounts, click the New button to the right. A window will pop up, and from here you can choose an account type. Choose the type and then the specific account you need.

Adding a new account in QuickBooks

Please note: leave the balance, date, and sub-account fields are for now. You don’t need to mess with those.

Pro Tip: With numbered accounts (e.g., banks or credit cards) it may help to add the last four digits of your account # to the name in QuickBooks. This makes it easier to find if you have more than one bank account or credit card for your business.

Cost of Goods Sold Example

Same as before, select the New button in the transactions menu. Choose “Cost of Goods Sold” as the Cost of Sales detail type. Enter the name "Amazon Service Fees – CoS" to make it easily identifiable. That's it!

See Also: Demystifying Cost of Goods Sold for Amazon Sellers

Pro Tip: when you would like to enter multiple accounts, you should choose “Save and New” instead of “Save and Close.” The latter makes you go through the whole process from the beginning, while the former opens up this window again and lets you put a new account type in immediately.

Tips and Best Practices for Working with Chart of Accounts

1. Old Accounts

If you don’t plan on using an account any longer, make the account inactive or make it invisible. Delete any accounts that you never use.

There may be some accounts that QuickBooks consider essential and won’t let you delete.

2. Overly Specific Accounts

Most businesses have “Meals and Entertainment” as standard. Some people would prefer to split them into specific accounts for “Meals” and “Entertainment.” That make sense and would be okay.

What you don’t need to do is take it another step and have different accounts for different restaurants. You don’t need to be so specific in naming your accounts.

An account like “Office Supplies” is standard for most businesses. Some people will then make an account for “Office Equipment,” thinking that they’ll use it when they buy something for their offices like a calculator or printer. This is going to trip you up in the future. Where would you put toner? Toner belongs to office equipment, but it isn’t equipment in and of itself.

If you aren’t able to tell instantly where something goes between two accounts, then you’ve likely got too many accounts that are too similar. It’s time that you started merging and renaming accounts and thought about reigning in the tendency to add new accounts rather than pick from the ones you have.

3. Specific Dates

Much like specific accounts, particular dates have no place in the COA.

For example, you could have an account called "State Taxes." What you don’t need is an account called State Taxes 2018. When will you ever use that when the year is over again?

Any account that is either only going to be used a few times or is otherwise too specific, should be avoided.

4. Accounts Correctly

If you’re keeping track of loans in your equity account, tracking credit cards in bank accounts, and tracking expenses with negative income, or are doing anything weird like that, then you’ll make a lot of trouble for yourself.

While you might be able to force an account type to do something else, what you end up with is a strange-looking financial statement and – most likely – errors with your books.
Ask an expert or check the QuickBooks forums if you are confused.

5. Relying Too Much on Miscellaneous Accounts

If over 10% of your entries wind up in miscellaneous or uncategorized then you are likely doing something wrong.

There should only be a few transactions that you can’t classify properly when setting up QuickBooks.

Less than 1% of your total expenses should come under miscellaneous accounts by the end of the year. Ideally, it would be best to have no uncategorized expenses at all.

Connecting Banks and Credit Cards

After setting up QuickBooks chart of accounts, let's connect your bank and credit accounts for automatic sync with QuickBooks.

Open up the left main-navigation select Banking. The first time that you open up the banking section, you will be presented with a page about connecting accounts.

Search for the name of your bank - follow the steps to connect your bank account and finish setting up QuickBooks bank connection. Make sure that you also connect any credit cards you have for your business after connecting the business bank account.

Pro Tip: If you use a PayPal account for your business, then you can connect it now too. We don’t recommend doing that though.

Pro Tip #2: We recommend not connecting your Square or Stripe accounts. Most people who do end up connecting their Stripe/Square accounts create a complicated mess of duplicate transactions as these payments are also going to your bank account.

Fixing Opening Balances

If you have recently opened a bank account ( i.e. within the past 90 days) QuickBooks should correctly display the opening balance for you.

If the bank account is older than 90 days, then you have to adjust so your books to only show relevant data - not old activity and balances.

If you started your business last year (let’s say October as an example) then I recommend setting up QuickBooks to get back to January of this year at the very least.

If you go back to when the business opened up and the account was new, then there’s no need to worry about fixing balances. If your account has other activity or you don’t go all the way back to when it was opened, then you will have to change the opening balance.

PROTIP: Look at the bank balance on the day before your first business transaction. That is how much you want to enter as the starting balance for your business. That way the account should reconcile, meaning that the balance from QuickBooks matches that of your bank statements. You can do this by adding how much money you need through a journal entry to get the correct balance. You can attribute this to the owner or a shareholder so that it doesn’t affect business operations.

Entering Previous Expenses

Now we’ll be using the list of expenses that you made before opening your business bank account or using a business credit card.

We’ll go through one journal entry per month to allocate the expenses to the proper account and offset the total you spent as money invested into the business. This helps to reduce your tax burden as it allows you to write off the investment against the income it earns.

Start by sorting expenses by date and then grouping them together by month. If you had your first expense in January for example, then you are going to combine all of January into a single entry and then February into a separate entry and so on and so forth until everything is done.

If you have more expenses than you paid off with personal funds even after opening a bank business account, then these can be included in this way. You should try to move towards purchasing everything through business accounts as soon as possible though for tax and liability purposes.

That's all we have for now for setting up QuickBooks as an Amazon FBA Seller. For additional tutorials check out the rest of our taxomate Amazon accounting and booking blog!

How do I find my Amazon FBA Sales Tax Nexus?

The main reason that people will comfortably buy things from Amazon – and thus the people selling on there – is because they know that Amazon Prime allows them to receive their packages in two days, if not less. Everything great must have some kind of catch to it though, for Amazon sellers, the catch is Sales Tax Nexus.

Amazon can deliver products nationwide so quickly because they have them sent out to distribution centers before they are even ordered.

You must be registered as a Pro Seller to get Amazon sales tax, which is important because their reports are far more comprehensive for a Professional Seller than they are a regular one.

Amazon FBA Sales Tax

What is Sales Tax Nexus?

The word “Nexus” comes from the Latin word meaning to “tie” or “bind.” A sales tax nexus could be considered something that ties your business to the state.

U.S retailers are required to collect the sales from buyers where they hold a “sales tax nexus.” The following activities may establish a sales tax nexus:

• Location: This includes any physical place of business such as an office, store, or warehouse.
• Personnel: The personnel at your business are individuals who are employees, salespeople, contractors, installers, and anyone else who works for your business in some capacity.
• Inventory: Many states will consider holding inventory in-state to create a nexus even if you don’t have any other employees or places of business there.
• Sales (the Economic Nexus): For about half of states with a sales tax, sellers who generate revenue or transactions over a set threshold will be required to collect sales tax. The threshold for revenue is around $100,000 and the transaction threshold is around 200, but it can vary state by state.
• Affiliates: An affiliate is someone who advertises your products and services for a piece of the profits and having one can create a nexus.
• Drop-Shipping: There are some situations where having a third-party shipping service that delivers products for you creates a nexus.
• Selling products at an event (i.e. a tradeshow): Some states consider you to have nexus even when selling only temporarily, such as at an event.

What is Economic Nexus?

An “economic nexus” is when sellers are required to collect sales tax because they reach a threshold of either money from the sales or number of transactions. These thresholds are usually $100,000 in sales or 200 transactions in a year.

Economic Nexus is The Newest Kind of Nexus

The economic nexus is the newest kind of nexus for the United States. Around half of the states with a sales tax have their own economic nexus laws. More states have announced they will introduce laws or regulations about economic nexus too.

The economic nexus only came into effect in June of 2018, following a Supreme Court ruling in the case of South Dakota vs Wayfair, which is why it’s a relatively new issue.

How to Determine you Have a Sales Tax Nexus in a US State

Here are the questions you can ask yourself to determine if you’ve got nexus with a state;

• Do you have a physical presence in the state, such as a location or warehouse?
• Do you have anyone working for you in the state such as a contractor, employee, installer, or salesperson?
• Do your sales or transactions in a state exceed the economic nexus threshold of that state? If you don’t know, then check with TaxJar’s Sales and Transactions Checker
• Do you have a relationship with a drop-shipper in the state?
• Do you have an affiliate program and any affiliates in the state?
• Do you cross state lines to sell products at events like craft fairs and trade shows?

If you answered yes to any of those questions, then here’s how you can explore if you have nexus or not;

You have nexus. Now what?

Amazon Sales Tax Nexus

Amazon makes it easier to determine sales tax nexus thanks to their Amazon Fulfillment reports. These reports will tell you where Amazon stores your inventory. Here’s how to access the Amazon seller sales tax report:

1. Open Seller Central
2. Open Reports
3. Open Fulfilment

The Inventory Event Detail section shows you where Amazon stores you inventory

There’s a lot of information on the Amazon Inventory Event Detail report, but it’s better to download the report for yourself then try to read it all on the screen.

Choose the download tab and then pick a time-frame that you want. If you’re interested in determining the states where you have sales tax nexus, choose the date when you first started selling products on Amazon.

You can do this using the exact date option on the report. Choose the dates you want and then wait a few minutes for the report to be generated. It can take longer if there is more data to collect.

You can download the report when it finishes generating. The report will be available as a .txt file and you can open it as is or import it into Excel. Select All and copy and paste it into the spreadsheet. The “fulfillment-center-id” column is where you can see information on all the Fulfilment Centers where Amazon stores your inventory. This is where you have nexus and where you would need to collect sales tax.

Read also: The Ultimate Sales Tax Guide for Amazon FBA Sellers

Sales Tax Nexus and Inventory Event Report

After opening the Inventory Event detail, you’ll be greeted with something like this;

The column that is most interesting to us right now is the fulfilment-center-ID. In the worksheet, click the top row of the column and choose the filter symbol, either on the Quick Access Toolbar or with the ribbon, and this puts a down-arrow in the top row of the worksheet.

Click on the down-arrow and you’ll find a list of all the fulfillment centers where your inventory has been stored. Warning - this may be quite a lot of information!

Fulfillment Centers where Amazon stores your inventory

Determining Your Sales Tax Nexus

You’ve now got a complete list of all the fulfillment centers where Amazon has stored your products.

If there are any centers that you don’t expect to see then uncheck “Select All” and click the boxes for the centers that seem questionable. This brings up a list of all the products stored in those centers. This is just for your information though. You need to know all the fulfillment centers where your inventory is located.

You might be wondering what fulfillment centers the letters and numbers represent. The center names are determined by the airport closest to the fulfillment center. DFW would mean Dallas Fort Worth Airport, which is – of course – in Texas. CHA is the Chattanooga, TN airport, meaning Amazon stores your inventory in Tennessee.

Amazon Fulfilment Centers

The numbers after the airport designation indicate how many fulfillment centers are near the airport. This website has a list of all airports by code and state, and here is where you can find a list of all the many Amazon Fulfillment Centers.

📺 Top 10 YouTube Channels for Amazon Sellers in 2020

There are several guides out there on how to have a successful business on Amazon, but we at taxomate always found it easier to watch someone explain it than to read thousands of words. That’s why we collected a list of some of the top YouTube channels for Amazon sellers for you!

1. Kevin David
2. FulfillmentByAmazon
3. Jungle Scout
4. Project Life Mastery
5. Full-Time FBA
6. Dan Vas
7. Derrick Struggle
8. Seth Kniep
9. Wholesale Ted
10. Life Success Engineer

1) Kevin David

Total Subscribers: +700k

Creator of what he calls the “Freedom Movement” - a massive movement of people looking to financially free. He quit his 9-5 accountant job to focus on making money online, including passive income. He shares his experiences and knowledge with the rest of us, so we don’t feel the stress of feeling trapped in a desk with a tedious job that has nothing more to offer.

2) FulfillmentByAmazon

Total Subscribers: +60K

The official YouTube channel for Fulfillment by Amazon goes into detail on how FBA works. Ship to an Amazon FBA center and they take care of your inventory doing all the work for you while you still get an income for each sale. If you think this option applies to what you want to make sure to check it out!

3) Jungle Scout

Total Subscribers: +132k

Created in 2015 by Greg Mercer as a solution to the struggle new Amazon sellers usually go through. He created a toolkit that people can acquire full of tools and resources to launch and grow a business on Amazon.

4) Project Life Mastery

Total Subscribers: +800k

Stefan James from Project Life Mastery focuses not only in giving handy tips and strategies for making money online but also how to change your mindset and to live a healthy life as well while you are at it. Sometimes that’s all we need to make that one decision that can change our whole life into a positive outcome.

5) Full-Time FBA

Total Subscribers: +30k

Created by Stephen and Rebecca Smotherman, they have been in the Amazon selling the business since 2011 and 2013, meaning they have many years of experience to back them up and know what some of the common mistakes new sellers make are. Stephen and Rebecca both part-time work hours selling online, which combined, works great for them and their family. This allows them to have the commodity of having your schedule working from home.

6) Dan Vas

Total Subscribers: +74k

Dan Vas is a self-made internet millionaire entrepreneur, YouTuber, and influencer. He believes everyone has a significant potential to achieve great things and live their best life. Through his videos, he shares his experiences and tips to make this happen and help those people awake from their monotonous life and opt for new business opportunities. He is living the dream!

7) Derrick Struggle

Total Subscribers: +173k

This YouTuber known as Derrick Struggle started as young as 14 years old selling t-shirts and built his official first company at 16, he confirms he has made over 8 figures thanks to different e-commerce business and passive income. His goal is to share his knowledge with the rest of us. I wonder what we were doing at 16 instead of making millions like him.

8) Seth Kniep

Total Subscribers: +180K

With 24k in debt, living a miserable life and fed up with his job, Seth decided enough was enough, so he started to make changes with a single dime. Today he is a self-made millionaire, he has different passive income businesses and is ready to help people like us, live their dream lives.

9) Wholesale Ted

Total Subscribers: 376K

At wholesale Ted, you can find creative and engaging content about e-commerce, Amazon tips, training, case studies & tutorials. Their videos focus on actionable advice on how you can start, grow & scale your own business

10) Life Success Engineer

Total Subscribers: 4k

Although still considered a small channel compared to the previous ones mentioned, Life success Engineer has so much to offer and will grow without a doubt. They say their mission is to help people take MASSIVE ACTION in life to achieve the goals and visions they have! Make sure to check them out in their journey to help other people grow with Amazon tips and tricks.

🤑🤑 How to pay yourself from your Amazon Seller LLC Business

Looking to stand out from the crowd and protect your assets by turning your Amazon seller business into an Amazon Seller LLC (Limited Liability Company)?

Why it Makes Sense to Establish an Amazon Seller LLC

There are many advantages to establishing an Amazon Seller LLC, including:

1. Increasing Reputation

Plain and simple, when customers see a product is from an established business with a business name, they are more likely to make the purchase.

2. Protect your Assets

LLCs are separate legal entities from you as a person. In other words assets of your business and your assets are kept separate. Anything that happens to the company shouldn’t impact your assets.

3. Easier to Manage Finances

Having a different business bank account for your business makes it much easier to track income, outgoings, and profits. Taxes at the end of the year are easier since you only have business expenses in your accounts, instead of having to sift through and separate personal and business expenses.

LLCs are one of the best business entities for small business owners such as Amazon sellers:

• Simple and often less expensive to establish.
• Easy to run: primary business entity for small business and solopreneurs (sole proprietors).
• Less legal and compliance obligations compared to other business structure types.

How to Pay Yourself From an Amazon Seller LLC

Now you know the reasons behind forming an Amazon Seller LLC, let’s look at how to pay yourself from one.
The two main options to pay yourself as from an LLC are to:

Option 1: Treat yourself as an employee and pay yourself a wage.

Option 2: Treat yourself as an LLC member and take a distribution of the profits.

Option 1: Earn Wages as an Employee

Paying yourself as an employee of your Amazon Seller LLC means giving yourself regular compensation that you can plan around. This is the right choice if you want to get a steady income.
In order to pay yourself a salary from a single member LLC or any other kind of LLC, you have to be actively working with the business. You need to have a real role in the company and have real responsibilities to justify your wages.

Multiple LLC Owners: Where there are several LLC owners, and all participate equally in running the business, you aren’t able to pay just one person a salary without paying one to the others.

Single Member LLC: If you were the only person with a management role though, then you could set a salary up for yourself without needing to pay salaries to other LLC members.

Employee wages are operating expenses and deducted from the LLC's profits. The IRS will only allow you to deduct reasonable wages, so make sure that the salary you pay yourself is fair and within the norms of your industry. You can also provide employees with bonuses, and that includes yourself. Once again though, these businesses have to be reasonable compared to the salary you are paying yourself.

You’ll have to file the W-4 IRS Form to determine how much payroll withholding from each paycheck you’ll receive. The LLC pays you as a W-2 employee and therefore withholds income and employment taxes from the paycheck you receive. You will also have to pay income tax for the wages that you earn.

Option 2: Receive Distributions from Profits

Another way to pay yourself from an Amazon Seller LLC is to receive distributions of the LLC’s profits.

Each member owns their percentage of the LLC, called their capital account. The year-end profit is then distributed based on the size of these percentages.

For example, if an Amazon Seller LLC made $100,000 in profit and you own half of the company, you are entitled to receive $50,000.

Setting Up Draws

You can set up a draw to receive payments across the year or draw against the year-end profits.

If you believe that your percentage would be worth $12,000 by the end of the year, then you could arrange to receive $1,000 a month. The total amount drawn across the year is deducted from year-end profit. So if you were to draw $12,000 and the profits for the business ended up being $15,000, you can still get $3,000 at the year’s end.

If you are the sole member of the LLC, you pay income tax on distributions and have to file Schedule 3 to report the profits and losses of your LLC with your personal tax return.

If the LLC has more than one member, then the LLC is considered a partnership by the IRS. It is up to each member to report their share of the profits and pay their income taxes on their share.

The LLC should file an IRS Form 1065 to report profit distributions.

NOTE: You should keep in mind that these two options – receiving a salary and receiving distributions – are not mutually exclusive. If you receive a paycheck, you are still an LLC member and are still entitled to receive year-end distributions.

Other Options to Consider

These aren’t the only options you have at your disposal for paying yourself as from an Amazon Seller LLC. You also have the option of paying yourself as an independent contractor. This doesn’t come with many benefits though.

There is, of course, also the option of not paying yourself anything and letting the LLC keep the profits. You’ll still have to pay income taxes on the profits earned though.

How you choose to pay yourself is up to you, and can change depending on the kind of business you run, how many people are a part of the LLC, and how simple you want to keep things.

See also Legal Entities for US Amazon Sellers

Understanding Amazon 1099 to Prevent Catastrophe in the 2020 Tax Season

‍Let's get one thing clear, when it comes to your Amazon 1099, you're going to be in for a challenge. This form doesn't match any other downloadable report from the same Amazon platform.

Sellers are often worried - Amazon submits the 1099 report submits to the IRS.

Fear not! We've written the following post to take all the guesswork out of your Amazon 1099 numbers. This article will help you:

• Understand your IRS Amazon 1099-k Report.
• Determine your gross revenues so it squares with the figures on your 1099-k Amazon report
• Calculate all the expenses you're charged at Amazon
• Figure out any Amazon refund amounts
• Gain a clearer understanding of how your biweekly Amazon payments are calculated

Understanding the Amazon 1099-k

The revenue figures you see on your Amazon 1099 report is the total of the following:

• Sales of products
• Credits for shipping
• Promotional rebates
• Sales tax collected

To track down these numbers, you simply need to download your account's date range transactions report.

To access the transactions report, follow these steps:

1. Click Payments on your Reports tab
2. Select Date Range Reports on your Payments page
3. Select Generate Report on your Date Range Reports section
4. Pick Transaction among the options in the drop-down list under Select Report Type
5. Under Select Reporting Range choose Custom and select a time span of January 1 - December 31 for the applicable year.
6. Click on the Generate button
7. Download the resulting report.

After you have a copy of the report, filter it using Type. Make sure to include only Order transactions.

Once you have added the four columns listed earlier, the figures should mirror the 1099-k numbers reported by Amazon.

For the life of me, I am still confused about why Amazon did not make the transactions report and 1099 amounts easier to access.

Amazon 1099-k Figures and Bookkeeping

Amazon reports your 1099 to the IRS, so it is extremely important that your 1099 figures from Amazon match the revenue you report to the IRS.

Additionally, you don't want to end up paying more money than you have to in taxes.

To ensure this does not happen, we highly recommend you need to use some sort of bookkeeping tool. We created taxomate to automatically send all your financial accounting information (including data for 1099) to QuickBooks or Xero.

Whether you go with Xero or Quickbooks Online, the process I'm going to describe below is fairly similar among those two platforms. If you would like to see a detailed comparison of the two accounting software check out our article on the topic.

Amazon 1099 by Example

To get started, create or link your bank account to QuickBooks or Xero. This bank account will represent the accrual account credited when your Amazon store makes a sale. I dubbed this account the "Amazon Payment Account" on my accounting software (feel free to name it however you would like).

It's very important to note that the system that I've described below considers Amazon income to be earned once the customer completes the transaction. This is very important because the alternative way of accounting for this is to calculate income when Amazon actually distributes cash. This way, we're able to get the exact same revenue numbers which Amazon reports to the IRS using the 1099-k form.

Entering into QuickBooks / Xero

Photographer: Helloquence | Source: Unsplash

All the numbers that you need are going to be listed by the transactions report you downloaded from Amazon earlier.

To get started, create a Sales Receipt or Journal Entry in your accounting software for each settlement period with the customer "Amazon Marketplace Place".

The revenue amounts should total the numbers in your 1099. The income figures you may see include:

• Collected sales taxes
• Promotional rebates
• Credits for gift wrapping
• Credits for shipping
• Product sales.

Expense figures will not show up on your Amazon 1099-k but will show up in your transaction report. The expenses figures you may see include:

• FBA fees
• Amazon selling fees
• Advertising Fees
• Any other fees listed in the transaction report.

The deposit represented by the Sales Receipt or Journal Entry is accounted for in the Amazon Payment account, the accrual account. This allows for easy reconciliation with the bank deposit.

Once you save the receipt or entry, you can then match them over your bank deposits.

This article should have given you enough information to provide you with an idea of how to reconcile your 1099 with Amazon's reports!

🤖 Connect TurboTax with Amazon FBA Marketplace for Amazon Sellers in 2020 🤖

Step 1. Integrate Amazon and QuickBooks Online with taxomate

Integrating QuickBooks with taxomate is quick and easy. After connecting your accounts, simply map your accounts QuickBooks with income and expenses from your Amazon statement.

After sending a statement to QuickBooks for testing, you can now set up Amazon to auto sync with QuickBooks!

Step 2. Importing from QuickBooks to TurboTax

QuickBooks Online doesn't yet directly integrate with TurboTax Online.

However, worry not!

a. For TurboTax Online

You can easily run reports in QuickBooks Online to capture all the data required to enter into TurboTax, such as Profit & Loss and Balance Sheet reports.

b. For TurboTax Desktop

TurboTax Desktop (Mac or PC) allows you to import the QuickBooks Online file. Here are the steps to import:

Step 1. Open your return in TurboTax Business.

Step 2. From the File menu in the upper left corner, select Import > From QuickBooks.

Step 3. Follow the on-screen instructions to import.

Step 4. That's It! taxomate really makes Amazon Seller Central and TurboTax integration easy

Six Reasons to Use TurboTax

1. Taxes done right, guaranteed

The guarantee that they claim is 100% accuracy. Their solid error checks ensure that your tax return is finalized well. If you pay state penalty or IRS or interest due to any error TurboTax could possibly incur, they will pay the charge for you. That’s how confident they are that they can do their job spot on.

2. Expert help, live on-screen

An actual TurboTax expert will guide you on screen with their SmartLook system. They’ll draw right on your screen to get the answers you need in order to file seamlessly. All you need to do is follow the guide and head towards the best track.

3. Fastest tax refund possible

You can get the fastest tax refund here by simply filing your tax return digitally. If you buy the TurboTax Online or their CD/Download, you can even get the e-file of your federal tax return FREE of charge.

4. Capture your W-2 in a snap

Just capture a photo of your W-2 with your smartphone or tablet, confirm the information and watch as your data is carefully placed into each tax form suitable for you.

5. Security and confidentiality assured

Your information is in safe hands with TurboTax. You can file taxes with confidence with them.

6. Service on the go

Wherever you are, whenever you need to, you can get your taxes done with TurboTax mobile app. You can easily pick up where you left off even after switching devices.

What do I need to get started with TurboTax?

You don’t need anything complex. All you need to ready is your email address. In just a few clicks, you can get everything set with a breeze. Just answer a series of easy questions, and you’re good to go. You do not even have to get your 1099s or W-2s. TurboTax can import your data directly from over a million participating financial firms and employers.

Despite the convenience of TurboTax and other online tax solutions, only 21% of Americans actually use them. The majority of the rest still use live tax professionals to get the job done.

TurboTax costs less than a hundred bucks, and actual tax experts cost up to four times higher. Perhaps it’s about time for a wide adaptation of this resource to save cash and to promote real automation. TurboTax is a great solution for your Amazon seller bookkeeping needs.

So . . .

It's not an easy task to export your Amazon statements to QuickBooks/TurboTax. However, once you get started using taxomate it becomes much easier. Let taxomate do the heavy lifting!

How to Quickly and Cheaply Purchase Amazon UPC Codes 🏷️

As a new (or expert) Amazon Seller it is always important to understand Amazon UPC codes. Amazon requires all products to have a UPC prior to being listed.

The only requirement Amazon places on these codes is that you purchase a “GS1 UPC code”. However, you can't just create your own UPC Code, you have to buy through a reputable website (see below).

Do you Need Amazon UPC Codes to Sell Products on Amazon?

The reason you need a UPC code to sell on Amazon is that you can enter something into the product ID field when you list a product for sale. Select “UPC” from the drop-down menu of the “Product ID” section. You can’t even list a product to sell on Amazon without an appropriate UPC code.

UPC Codes are also known as “barcodes”.

What to Put In the Amazon Product ID Section

EANs and UPCs are the main Amazon product IDs used in Australia, New Zealand, and many Western and European countries (including USA, UK, Canada)

How to Purchase Cheap Amazon UPC Codes

1. Buy Amazon UPC codes through a reputable website (see below)
2. Download the barcodes through an Excel spreadsheet and JPEG images
3. Create your Amazon Product Listing
4. Enter the UPC code into the “Product ID Field” to verify its authenticity
5. Complete your product listing

Where to Buy Amazon UPC Codes

When people look for cheap UPC codes they turn to shady sellers and get them from eBay. It’s most likely that these cheap codes are recycled. Using recycled codes may lead Amazon to believe you sell fraudulent products, which get your account shut down. Let's take a look at some trusted sellers of cheap Amazon UPC codes:

• Snap UPC: a trusted UPC code seller for Amazon. They also have codes for other sites including eBay. Sellers can buy individual barcodes for five dollars each, or get bundles for better savings – up to $0.10 per barcode.
• Order Barcode Labels is another trusted seller. Amazon sellers can use the website to generate barcodes for their products and purchase them. The prices for labels range between $15 for 250 labels up to $25.50 for 1000 labels. Labels are also available in a variety of materials and sizes, including the option to purchase waterproof labels.
• Buyabarcode.com: An online store where you can purchase barcodes at a range of prices from $75 for a single barcode to $995 for 200.
• Barcode Mania: One of the most reasonably priced barcode providers around. They have barcodes available for just $4.99 for a single barcode, with prices going up to $140 for 600 codes.

UPC Code for Amazon FAQ

1. How many UPC codes do I need per product?

You only need to list one UPC code for new products on Amazon. For example, one UPC code will cover all “t-shirts”, no matter how many shirts you sell.

2. I’ve never sold products on Amazon before but want to start a private label business. It asks me for a product ID whenever I go to create a new product. Is that where I enter the UPC code?

This is where the UPC code goes. You need a product ID to list a new product on Amazon. Choose UPC from the menu and enter the appropriate UPC code.

3. Will the UPC code be the same for the same products?

The UPC code for the same products will be the same. You can use one UPC code for many matching products. If you have already listed an item, then just change the amount of product you sell.

4. Do I need a UPC code to list a product I’ve already got a listing for on Amazon?

If you will list the same item more than once on Amazon you should be able to piggyback on the current details page instead of having to make a brand-new one. This means you don’t need to purchase a UPC code if you already have the item up for sale. Choose ASIN for the product ID and enter the ASIN number from the existing listing.

5. Do I need to physically put the Amazon UPC code on the products I list?

You can list as many products as needed through a single UPC code. If you are selling 100 hairbrushes, then you only need the one UPC code for the product listing on Amazon. You don’t need to actually put the UPC code on the product either.

Amazon gives each item you list a unique identifier. This code is what you put on the actual products. The UPC code is only there for listing the product.

6. What are some other common terms in the Amazon Product ID section of Amazon listings?

ASIN

The ASIN is the Amazon Standard Identification Number. It is a 10-digit alphanumeric unique catalog number assigned by Amazon that won’t actually be generated until the product is listed.

When creating a new product listing with a UPC code, Amazon assigns the new listing an ASIN identification. This is how the systems at Amazon keep track of which sellers are selling which versions of which items when multiple people list the same products.

GCID (for Advanced Users Only)

When creating a brand on Amazon you will be given a unique identifier for your brand to list products under. 

The ID can only be used when adding new products that are part of the approved registered Brand list.

Registering your brand on Amazon allows you to circumvent the entire UPC code stage of listing a product. It allows you to sell products without a UPC code. It’s something to consider once your sales ramp up on the platform.

GTIN

A GTIN is part of another code, such as an EAN or UPC code. These are 14-digit codes used to identify products, services, and items. Think of them as the umbrella that collects the GS1 barcodes we’ll be using, including UPC codes.

Keep things simple by keeping in mind that all product listings require a UPC code. This should be standard practice for you.

So . . . 

Remember that you only need a UPC code to make an initial listing on Amazon. You don’t need to physically apply them to each product. You also only require one UPC code for each variation of your product. You don’t need UPC codes if you sell via retail arbitrage. Products you get via arbitrate are shipped with barcodes that you can use to list and sell products.

Don’t forget that you just want to sell your products on Amazon. You don’t want to have to worry about UPC codes and logistics. You don’t need to get much deeper into the discussion on UPC codes. This is only a small part of ranking products on Amazon and running your own Amazon business.