What fees and shipping costs are tax deductible?

[777David]

For a reselling business (buying items to resell on websites such as Ebay and Poshmark) are the shipping costs to ship the item to the buyer tax deductible-- even if the buyer paid you money for the shipping costs? 

Also, are Ebay fees and Poshmark fees (and other reselling website fees for selling something on it) tax deductible?

[Mike9241]

you include the amount received for those costs in revenue and then you deduct what you paid as an expense. 

[MarilynG1 · Accepted solution]

Yes, shipping costs to ship resale items to buyers are a business expenses.  If the item sells for $50, for example, and shipping cost is $5, you would report $55 in revenue (amount paid to you by customer) then report $5 to 'Shipping Costs' on your Schedule C. 

Your Ebay/Poshmark fees are also an expense. You can enter them under 'Other Common Business Expenses' as 'Commissions'. 

Here's more info on Business Income and Expenses. 

[Ly29042003]

How to treat "handling" portion in "shipping and handling". I usually adding $1-1.50 as handling cost, covering my labor/time, printing shipping labels and so on, but deduct only actial expenses on shipping, taking this $1 as profit. Should i deduct it somehow as well? Thanks! 

[VolvoGirl]

@Ly29042003   Sorry no.  You can only deduct the actual expenses you paid.  Yes it will be part of your profit.  You can not deduct your own labor or time.

[Mike9241]

just additional profit over and above the actual cost of the labels and printing them. 

[Ly29042003]

Thanks you, I feel the same way, or it will be a double dip in expenses. The lady from another forum sent me to read the IRS to support her opinion that you can deduct it.

[Ly29042003]

Thanks!