Tax documents for Shopify store owners
A Shopify store has more moving parts than a single marketplace: a payments processor, apps, ad platforms, shipping carriers and sales tax in several states. Your preparer needs reports that reconcile store sales to what actually reached your bank account.
Income documents
- Shopify sales summary and finances reports for the year, by month
- Shopify Payments or PayPal payout reports, including fees and chargebacks
- Form 1099-K from Shopify Payments, PayPal or Stripe, where issued
- Sales from other channels (marketplaces, wholesale, in-person events)
- Gift card sales and redemptions report
Expenses and receipts
- Supplier, manufacturer and print-on-demand invoices
- Shopify subscription, app and theme charges
- Payment processing fees (these are netted from payouts, so they need the fee report)
- Facebook, Google, TikTok and email marketing spend
- Shipping labels and carrier invoices, plus packaging costs
- Freelancers, designers and virtual assistants, with their invoices
- Duties and import fees on goods shipped from abroad
Other records to gather
- Year-end inventory count with cost per item
- Returns, refunds and discount code reports
- Sales tax collected by state and the returns filed, including any state registrations
- Business bank and credit card statements
- Payroll or contractor summaries if you have helpers
- Home office and storage space details if you hold stock at home
Common mistakes to avoid
- Recording the payout as revenue and ignoring processing fees and refunds taken out of it
- No inventory count, so cost of goods sold is a guess
- Collecting sales tax in a state and never filing there
- Ad spend paid on a personal card and left out of the books
- 1099-K totals that include sales tax and shipping, so they do not match revenue
Frequently asked questions
Why does my Shopify payout differ from my sales?
Payouts are net of fees, refunds, chargebacks and timing differences. Your preparer reconciles the finance reports to the payouts so that revenue and fees are each recorded correctly.
Do I owe sales tax in other states?
Possibly, if you cross a state's economic nexus threshold. This is worth raising with your preparer early, because registrations and past filings matter.
What should I do about dropshipping costs?
Keep the supplier invoice for every order or the supplier's monthly statement, so the cost of goods can be matched to your sales.
Related checklists
This is a general checklist to help you gather paperwork, not tax or legal advice. Rules and thresholds change and depend on your situation, so confirm details with a qualified preparer or the IRS.