Year-End Checklist for eBay Sellers: Inventory, Records, and Tax Prep
Quick answer
At year-end, eBay sellers should count and value remaining inventory, write off items that are unsellable, reconcile eBay payouts with bank deposits, download eBay's annual tax documents and transaction reports, total expenses and mileage, and produce a full-year profit and loss statement. Then review what worked — best categories, sources, and months — and set next year's targets. This is general guidance; confirm tax specifics with a professional.
Key takeaways
- Count inventory on or near the last day of the year and record its cost value.
- Identify and write off damaged or unsellable items with your accountant's guidance.
- Reconcile payouts and bank deposits so every dollar is accounted for.
- Gather eBay tax forms, transaction reports, receipts, and mileage totals.
- Use the full-year P&L to decide what to do more of — and less of — next year.
The end of the year is the best time to clean up your books and plan the next twelve months. A few hours of work in late December or early January can save days of stress at tax time and give you a clear picture of what your business actually earned. Here's a checklist you can follow every year.
Step 1: Count and value your inventory
- Count every item on hand — listed and unlisted — as close to year-end as possible.
- Record each item's cost (what you paid, not what it might sell for).
- Total the cost value of remaining inventory.
Ending inventory affects your cost of goods sold for the year. A good SKU system makes this much faster. See tracking COGS for how costs flow through.
Step 2: Deal with unsellable inventory
Identify items that are broken, obsolete, or clearly won't sell. Decide whether to donate, discard, or sell them as a cheap lot. Ask your tax professional how to treat their cost — and keep a record of what was removed and why.
Step 3: Reconcile payouts and bank deposits
Match each eBay payout for the year to a bank deposit. Check that refunds, holds, and fees charged to a card are all accounted for. See bookkeeping for eBay sellers for a monthly version of this step that makes year-end easy.
Step 4: Gather tax documents and records
- eBay's annual tax documents (including any 1099-K) — see 1099-K guide
- Full-year eBay transaction report
- Inventory purchase records and receipts
- Shipping receipts for labels bought outside eBay
- Expense receipts: supplies, equipment, software, storage
- Mileage log totals
- Home office details, if applicable
See common reseller expenses for categories to check.
Step 5: Produce your full-year P&L
Build a yearly profit and loss statement: revenue, cost of goods sold, selling costs, operating expenses, and net profit. Compare it with last year if you have one.
MyOrderProfit produces yearly P&L statements from your synced orders — sales, eBay fees, shipping, and item costs — with CSV export, so this step can take minutes instead of a weekend.
Step 6: Review the year
| Question | Where to look |
|---|---|
| Which categories earned the most profit? | Profit by product/category |
| Which sources were most profitable per hour? | Profit by SKU source code |
| Which months were strongest and weakest? | Monthly P&L |
| Did your fee rate or shipping % rise? | Fee and shipping trends |
| Where did returns cluster? | Return rate by category |
See 10 metrics every seller should track.
Step 7: Set next year's targets
- Monthly net profit goal
- Target margin and sell-through
- Sourcing budget based on cost of goods sold
- One or two systems to improve (listing speed, shipping costs, bookkeeping)
Use your seasonal calendar to plan when to source and when to expect busy periods.
Frequently asked questions
Do eBay sellers need to count inventory at year-end?
Most resellers who track cost of goods sold should count and value remaining inventory at year-end, because ending inventory affects the cost of goods sold reported for the year. Confirm with your tax professional.
What tax documents do I need from eBay?
Download eBay's annual tax documents, including any Form 1099-K, and your full-year transaction report, and combine them with your purchase records and expense receipts.
How should I review my eBay business at the end of the year?
Build a full-year P&L and review profit by category, source, and month, along with fee rate, shipping costs, and return rate, then set targets for next year.