Expenses

Deductions for resellers

Updated October 2, 2026 6 min read

A deduction you can't back up with a record is one you can lose. This page covers the deductions and the records that support them.

What is the 2026 mileage rate for resellers?

For 2026 the IRS business standard mileage rate is 72.5 cents a mile for miles driven January 1 through June 30 and 76 cents from July 1 through December 31. The IRS set the first rate in IR-2025-128 and raised it in Announcement 2026-11, citing fuel prices. For 2025 the rate was 70 cents.

Miles between business stops, such as one sourcing stop to the next, a post office run or a storage-unit visit, can be business miles. Whether the trip from home to your first stop counts depends on the commuting rules in Publication 463: with no regular workplace away from home and no home office that is your principal place of business, the first leg to a stop inside your metro area is commuting. Log each half of 2026 separately, because the rate differs; the 2026 calculator has a field for each half. You can use the standard rate or your actual car costs, and to use the standard rate on a car you own, you must choose it in the first year the car is available for business use (IR-2025-128).

Which reseller costs are deductible?

The costs worth checking are the small repeated ones and the ones taken out before a payout: packaging, postage, storage, software, bank charges, part of your phone, and marketplace and ad fees. Each can be an ordinary business expense on Schedule C if you can back it up with a record.

• Packaging and supplies. Mailers, boxes, tape, poly bags, tissue, labels. Small each time, but they add up.
• Postage you paid. Deductible, and the Schedule C instructions put it on line 18. The shipping buyers paid you is income, and both belong on the return.
• Storage. A unit rented for inventory is a business expense.
• Subscriptions and software. Listing tools, bookkeeping software, photo apps.
• Professional fees. Bookkeeping and tax preparation for the business.
• Bank and payment fees. Charges on the business account.
• Equipment. Scales, printers, lights, shelving. Depending on cost, these may be deducted at once or depreciated.
• Phone and internet. The business share, where you can back up the split.
• Marketplace and ad fees. When a platform takes them out before your payout, they never show up as a separate charge, so pull them from your sales reports.

What is the de minimis safe harbor, and does it cover inventory?

The de minimis safe harbor lets you deduct tangible property costing up to $2,500 per invoice or item in the year you buy it, but not inventory. You can use it instead of depreciating the item, if you expense those items in your books and don't have an applicable financial statement, such as an audited one (IRS; Notice 2015-82). The IRS says directly that it doesn't cover inventory.

You elect it each year by attaching a statement titled "Section 1.263(a)-1(f) de minimis safe harbor election" to a return filed on time, extensions included. For a reseller it fits the gear: a label printer, a scale, shelving, a light box. Materials and supplies that cost $200 or less, or last 12 months or less, have their own rules too.

Can you deduct home space used to store inventory?

Yes, if it meets five tests, and you don't need the usual exclusive-use test. IRS Publication 587 (2025) allows it when you sell products at wholesale or retail, keep the inventory at home for the business, your home is the business's only fixed location, you use the space regularly, and it's a separately identifiable space suitable for storage.

The simplified method is $5 per square foot for up to 300 square feet, a $1,500 ceiling (IRS). The regular method uses Form 8829 and your actual home costs.

What is the qualified business income deduction?

The qualified business income deduction lets many sole proprietors deduct up to 20% of their qualified business income, with or without itemizing (IRS). It lowers income tax. It doesn't change self-employment tax, which Schedule SE figures from your Schedule C profit. It's claimed on Form 8995 or 8995-A. The 2025 law removed the end date it had after 2025, so it applies to 2026 (26 U.S.C. 199A, as amended).

What records does each deduction need?

A deduction needs records that back it up: receipts, the business purpose, and how you split anything used partly for personal life. Every deduction above is ordinary, so the records decide whether you get it. Keep records for at least 3 years after filing in the usual case, and 6 years if you left out income worth more than 25% of the gross income on your return (IRS).

1. Run business spending through one accountThe statement shows every payment, with no extra work.
2. Photograph paper receipts at the tillThermal paper receipts fade. A photo takes seconds.
3. Log mileage in the car, not at your deskIt has to be kept at the time to be worth much. A notebook in the glove box works.
4. Categorize monthly, not yearlyDoing it monthly keeps each pass short. Doing twelve months at once in April does not.
5. Note the business purpose for anything unclearOne line at the time beats an explanation built a year later.

What doesn't count as a deduction?

Two things look like deductions and aren't: inventory you kept for yourself, and trips that were mostly personal. The IRS standard, in the Schedule C instructions, is that a business expense be ordinary and necessary.

• Items bought to resell and then kept. If it ended up in your closet, it isn't inventory that sold.
• Trips that were mostly personal. A sourcing stop on a family vacation doesn't make the vacation deductible. Business miles means miles driven for business.

Keep reading

• Quarterly estimated taxes for resellers

  The 2026 due dates, who has to pay, the safe harbor, and the share of profit to set aside.

• Schedule C for resellers, section by section

  Gross receipts, cost of goods sold, the expense lines that apply, and where postage goes.