6 Accounting Questions Every Amazon Seller Should Ask Their CPA
Kimberly Green | 2026-04-14
Most Amazon sellers never ask their CPA the right questions. They hand over receipts and settlement reports, get a tax bill in April, and hope for the best. Meanwhile, their CPA might not understand the unique structure of Amazon's payout system, FBA nexus issues, or the tax deductions they're leaving on the table.
Amazon accounting isn't like Shopify. It's not like eBay. It's not like traditional retail. The settlement structure is weird. The tax nexus is weird. The inventory rules are weird. A CPA who does small business taxes for dentists and plumbers will fumble Amazon questions. They'll miss Section 199A deductions. They'll overlook multi-state sales tax registration. They'll let you pay thousands more than you should.
Here are six questions to ask your CPA right now. If they hesitate or give vague answers, it might be time to find someone who gets Amazon.
1. Have You Reconciled My Amazon Settlement Reports?
Amazon's settlement structure is unique. You don't get paid on each sale. Instead, Amazon deposits money into your account on a rolling 14-day cycle, combining sales, refunds, fees, and chargebacks into a single number. Most accounting software can't map this directly to individual orders.
If your CPA isn't reconciling your settlement reports line-by-line against your recorded revenue, they're missing discrepancies. A seller with $500K in annual revenue might have a $3K-$8K variance between what they think they earned and what actually settled.
Ask: "Have you downloaded and reconciled my Amazon settlement reports?" If they say "no" or "we just use your bank deposits," find a new CPA.
2. How Are You Managing My Multi-State Sales Tax Nexus from FBA Warehouses?
This is the question most Amazon sellers never think to ask—and it's the one that costs them the most. Because it creates liability.
When you use FBA, Amazon stores your inventory in their warehouse network across multiple states. You don't decide which states; Amazon decides. But that inventory creates physical nexus in every state where Amazon warehouses your stuff. Physical nexus = you're legally responsible for collecting and remitting sales tax there, even if you've never visited.
States and the IRS view FBA inventory as your property in their jurisdiction. The nexus is real. Most sellers don't register until they get a letter from a state tax board demanding back taxes, penalties, and interest. A seller with inventory across 8 FBA centers might owe $15K-$50K in unpaid sales tax on sales they forgot they made.
Ask your CPA: "Which states have physical nexus because of my FBA warehouses, and are we registered in all of them?" Their answer should include actual warehouse locations, not guesses.
3. Do You Understand Amazon's Return Reserve?
Amazon withholds a percentage of your payouts as a "reserve" to cover potential returns and refunds. For new sellers, this can be 5-10% of weekly revenue. For established sellers, it's lower, but it's still there.
The reserve sits in your Amazon account—not your bank account—and throws off your accounting if you're not careful. Some sellers record this as revenue when it's withheld. Others never account for it at all. Both approaches create mess.
Your CPA needs to understand the reserve cycle: Amazon holds it, releases it after a set period (usually 30-90 days), and sometimes increases it if returns spike. You need to record it correctly so your revenue matches reality.
Ask: "Do you account for my Amazon return reserve separately?" The answer should be yes, with a clear explanation of how.
4. Are We Claiming the Section 199A Pass-Through Deduction?
IRC Section 199A (the "qualified business income deduction") lets pass-through owners deduct up to 20% of their qualified business income. At $200K profit, that's $40K off your taxable income. At $500K profit, that's $100K.
Most Amazon sellers operating as sole proprietors or LLCs never claim it because their CPA doesn't know about it or thinks it doesn't apply to eCommerce. It does.
The rule has edge cases. Income phase-outs kick in above $182,100 (2023). S-corps need W-2 wages. Multi-brand sellers have aggregation rules. But for a serious seller, this one deduction saves $15K-$50K annually. A seven-figure seller? Try $40K-$150K depending on structure and income level.
Ask: "Does my business structure qualify for IRC Section 199A, and are we claiming the full deduction?" If they say "maybe" or "I'll have to check," find a new CPA. This shouldn't require homework.
5. How Are You Handling Amazon FBA Accounting for Inventory Purchased Months Before Sale?
Most CPAs don't understand Amazon FBA accounting. They think COGS lines up with the sale date. It doesn't.
You buy 500 units in January. You store them in FBA. You sell them throughout Q1, Q2, and into Q3. Your CPA needs to track which units sold when and assign COGS correctly to each month. If they don't, your monthly profit is wrong, your tax liability is wrong, and your balance sheet is wrong.
Example: You buy $50K in inventory in January but only sell $20K of it by December. The remaining $30K in unsold inventory sits on your balance sheet. Your CPA needs to account for it properly, or you'll overstate profit by $30K and overpay taxes.
Ask: "What inventory costing method are you using—FIFO, weighted-average, or something else? And can you show me how you're matching COGS to the month of sale?" If they can't answer in detail, they're not set up for Amazon FBA accounting.
6. Are You Tracking Every Category of Amazon Fees?
Amazon charges referral fees, FBA fees, advertising fees, subscription fees, transaction fees—the list goes on. Many CPAs lump these into a single "Amazon fees" line item.
That's a mistake. Different fee categories have different tax implications. Referral fees reduce revenue. FBA fees are operating expenses. Ad spend can be deducted. If your CPA isn't breaking these out, they're missing optimization opportunities and potentially exposing you to audit risk if the IRS questions your expense categories.
Ask: "Are you categorizing each type of Amazon fee separately?" The answer should be detailed, with specific attention to FBA fees versus advertising versus referral.
What to Do If Your CPA Fumbles These Questions
If you get hesitant answers or blank stares, you need someone who specializes in Amazon sellers. Not a general tax preparer. Not a CPA who does "eCommerce, among other things." Someone who lives and breathes Amazon accounting.
ECOM CPA fits that bill. They're based in Grants Pass, Oregon, and work exclusively with 7-9 figure eCommerce sellers. Their team's entire job is solving the exact six problems we covered: settlement reconciliation, multi-state FBA nexus, return reserves, inventory costing, and fee categorization.
Their typical client switches from a general CPA and saves $8K-$25K in year-one tax liability just from fixing Section 199A and nexus issues. Clients report clean audits, proper settlement reconciliation, and—for the first time—actual confidence in their accounting.
They charge $1,250-$5,000 per month depending on complexity. For a seller doing $500K+, that investment pays back multiple times from the deductions and errors they catch.
Ask These Six Questions This Week
Don't assume your CPA understands Amazon. Ask them these six questions. Write them down. Record their answers.
If they hesitate on settlement reconciliation, blank on multi-state nexus, or don't mention Section 199A, you'll know it's time to switch. A good Amazon CPA isn't an expense. They're a tax deduction that pays for itself.
Run through the list with your CPA today. If they can't answer clearly, schedule a call with ECOM CPA. Other sellers at your profit level have already made the switch. You might be next.