Year-End Tax Moves for eBay Resellers Before December 31, 2026

What eBay and Facebook resellers can still do before December 31, 2026 to cut taxes: inventory counts, supplies, mileage, dead stock and the Jan 15 estimate.

Every December, some reseller somewhere buys a $3,000 pallet "for the tax write-off." For most resellers, that does not lower the 2026 tax bill at all. Inventory is deducted when it sells, not when you buy it.

There are real moves that help, though, and most of them have a hard deadline of December 31. This article walks through what to do in the next ten weeks, with the IRS sources, as of October 2026. It is general information, not tax advice; your situation may differ, so run the big decisions past your tax professional.

Myth first: buying inventory in December

Resellers who file Schedule C report cost of goods sold in Part III. The formula is simple:

Cost of goods sold = beginning inventory + purchases - ending inventory

A pallet you buy on December 20 and still have on December 31 shows up in purchases and again in ending inventory. The two cancel out. You deduct it in 2027, when the items sell. (The IRS Schedule C instructions cover Part III; some small businesses use a different inventory method, which is a question for your tax pro, but none of them turns an unsold pallet into a big December deduction.)

Worked example

• Beginning inventory (January 1, 2026): $6,000
• Purchases during 2026: $40,000
• Ending inventory (December 31, 2026): $9,000
• Cost of goods sold: $6,000 + $40,000 - $9,000 = $37,000

Buy another $3,000 pallet on December 20 and do not sell any of it: purchases become $43,000, ending inventory becomes $12,000, and cost of goods sold is still $37,000.

Buy inventory in December because you can sell it, not to cut tax.

Move 1: plan a real December 31 inventory count

Because ending inventory lowers cost of goods sold, it has to be real. Overstating it raises your tax; understating it is a problem if you are ever asked to support it.

• Pick a day near December 31 and count what is on the shelves, listed or not.
• Value each item at what you paid (its share of the lot or pallet), not at its asking price.
• Keep the count sheet or export with your tax records.

This is where pallet buyers get stuck. If you paid $400 for 37 items, each one needs its share of that $400, and the ones still on the shelf at year end are your ending inventory.

AI Flip Ledger splits each lot cost across its items (evenly or by asking price), carries that cost to each sale, and shows the cost of everything still unsold. If you get stuck setting it up, real-person support comes from the owner, Johnathon Lawson: [email protected].

Move 2: deal with dead stock before December 31

Items that are broken, unsellable or that you have decided to give away should not sit in ending inventory at full cost. Before the year ends:

• Dispose of junk and note what it was and what it cost.
• Donate what you are not going to sell, and keep a receipt and a list. How donated inventory is treated for a business is specific, so ask your tax pro how to report it rather than assuming a charitable deduction.
• Mark down slow items now. An item that sells in December at break-even moves cash in 2026 and leaves your ending inventory. Our stale inventory markdown guide covers how to set the cut.

Move 3: buy the supplies and equipment you actually need

Unlike inventory, business supplies and equipment can usually be deducted in the year you pay for them. The IRS de minimis safe harbor lets a business without audited financial statements expense items costing up to $2,500 per invoice or item, if you make the election on a statement attached to your timely filed return.

For a reseller that covers most of what a shop runs on: a thermal label printer, a shipping scale, shelving, a photo light, a laptop under $2,500. The rule is the same as with inventory: buy it because you need it in 2027. A $600 shelf unit deducted at a 30% combined tax rate saves about $180. You are still $420 poorer than if you had not bought it.

Stock up on boxes, mailers and tape only to the level you would use anyway.

Move 4: finish your 2026 mileage log

Auction runs, pallet pickups, post office drops and thrift sourcing trips all count as business miles. 2026 has two IRS rates, per the IRS standard mileage rates page, as of October 2026:

• 72.5 cents a mile for January 1 to June 30, 2026
• 76 cents a mile for July 1 to December 31, 2026

Example: 1,800 business miles in the first half and 2,200 in the second half is $1,305 + $1,672 = $2,977 of deduction. Reconstruct missing trips now from auction invoices, pickup receipts and calendar entries while you still remember them. A log written in April is weaker than one kept as you go.

Move 5: make the January 15 estimate count

Estimated tax for income earned September 1 to December 31, 2026 is due January 15, 2027, per the IRS estimated tax FAQ. Resellers who had a strong Q4 are the ones who get surprised in April.

A simple set-aside rule: self-employment tax alone is 15.3% on most net self-employment earnings, before income tax. Many resellers set aside 25% to 30% of net profit (not of sales) and adjust with their tax pro. If your Q4 profit is $8,000, that is $2,000 to $2,400 set aside for January.

That only works if you know your net profit, which means fees, labels, ad spend and cost of goods subtracted from every sale. Our real profit per item guide has the formula.

Move 6: check your 1099-K and retirement options

• Form 1099-K: for 2026, platforms such as eBay and Meta report to the IRS when you exceed $20,000 and more than 200 transactions, per the IRS Form 1099-K page. All of your business income is taxable either way; the form only changes who tells the IRS. Our 1099-K guide covers matching it to your books.
• Retirement: a profitable year is a good time to ask your tax pro about a retirement account. For 2026, the IRS lists the IRA limit at $7,500 and the 401(k) employee limit at $24,500. Self-employed plans such as a SEP or solo 401(k) have their own rules and deadlines, so ask before December 31 which ones still apply to 2026.

A December checklist

1. Count and value ending inventory at cost.
2. Dispose of, donate or mark down dead stock.
3. Buy only the supplies and equipment you need, keep invoices.
4. Finish the mileage log at the two 2026 rates.
5. Set aside for the January 15, 2027 estimate.
6. Ask your tax pro about retirement and inventory method questions.

Frequently asked questions

Does buying inventory in December lower my 2026 taxes?

Usually not. Unsold inventory is counted in ending inventory, which cancels out the purchase in cost of goods sold. You deduct it when the items sell.

What is the de minimis safe harbor for resellers?

An IRS election that lets a business without audited financial statements deduct items costing up to $2,500 per invoice or item in the year paid, by attaching a statement to a timely filed return.

What are the 2026 IRS mileage rates?

72.5 cents a mile from January 1 to June 30, 2026 and 76 cents a mile from July 1 to December 31, 2026, as of October 2026.

When is the fourth-quarter 2026 estimated tax payment due?

January 15, 2027, for income earned September 1 to December 31, 2026.