Amazon seller bookkeeping: what records the IRS expects you to keep

The IRS lets you keep your Amazon books in any system that clearly shows your income and expenses (IRS: Recordkeeping). Generally, keep the records that support your return until its period of limitations runs out (IRS: How long should I keep records?). If someone else prepares your return, you stay accountable for the accuracy of every item on it (IRS: Topic no. 254).

What the IRS expects from your books

Your books must show your gross income, deductions and credits, and you must also keep supporting documents (IRS: Publication 583). Publication 583 (December 2024) is the IRS guide titled Starting a Business and Keeping Records. Backing up the entries, deductions and statements on your tax returns is your responsibility. The IRS calls it the burden of proof (IRS: Recordkeeping).

The IRS lets you choose any recordkeeping system suited to your business, as long as it clearly shows your income and expenses (IRS: Recordkeeping). The same test applies whether your books live in a spreadsheet, in accounting software or with a bookkeeper. Publication 583 also asks you to decide between single-entry and double-entry bookkeeping. It calls single-entry the simplest to maintain, but says it may not be suitable for everyone (IRS: Publication 583).

Supporting documents come from your transactions. Purchases, sales, payroll and other business transactions generate them. They contain the information you need to record in your books (IRS: Recordkeeping). How to classify Amazon fees in those books is a separate question, covered in are Amazon fees cost of goods sold.

Electronic records follow the same rules. Publication 583 says all requirements that apply to hard copy books and records also apply to electronic storage systems that maintain tax books and records. Such a system must index, store, preserve, retrieve and reproduce the stored books and records in legible format (IRS: Publication 583).

How long to keep business tax records

Generally, you must keep records that support an item of income, deduction or credit on your return until the period of limitations for that return runs out (IRS: How long should I keep records?). The period of limitations is a time limit tied to each return. The same IRS page lists these eight cases:

#	Situation	Keep the records for
1	Situations 4, 5 and 6 below don't apply to you	3 years
2	You file a claim for credit or refund after you file your return	3 years from the date you filed your original return, or 2 years from the date you paid the tax, whichever is later
3	You file a claim for a loss from worthless securities or a bad-debt deduction	7 years
4	You don't report income that you should report, and it is more than 25% of the gross income shown on your return	6 years
5	You don't file a return	Indefinitely
6	You file a fraudulent return	Indefinitely
7	Employment tax records	At least 4 years after the date the tax becomes due or is paid, whichever is later
8	Records relating to property	Generally, until the period of limitations expires for the year you sell or otherwise dispose of the property

Filing dates for the returns these records support are on the federal tax calendar.

What Form 5472 reporting corporations must keep

A reporting corporation must keep permanent books or records that are enough to show its federal income tax return is correct (IRS: Instructions for Form 5472). This includes records that might matter for the correct treatment of its transactions with related parties. Form 5472 is an IRS form, and this rule comes from its instructions (December 2024 revision). Those instructions set out which businesses count as reporting corporations, so check them or ask a qualified tax professional about your business.

The regulation on record maintenance, Regulations section 1.6038A-3, says a reporting corporation's records must be permanent, accurate and complete. They must also clearly establish income, deductions and credits (Cornell LII: 26 CFR 1.6038A-3). The regulation contains what it calls a safe harbor for records of related-party transactions. It says that safe harbor is not a checklist of records every reporting corporation must keep, or that the IRS should generally request.

The Form 5472 instructions (December 2024 revision) state a $25,000 penalty for a reporting corporation that fails to file Form 5472 when due and in the manner prescribed (IRS: Instructions for Form 5472). The penalty also applies to a failure to maintain records as Regulations section 1.6038A-3 requires.

Who is accountable when a preparer helps

You remain accountable for the accuracy of every item reported on your return, even though the tax return preparer always signs it (IRS: Topic no. 254). A paid preparer takes on duties of their own, but that accountability stays with you. Four points from IRS pages:

Question	What the IRS says
Who is accountable for the accuracy of every item on your return?	You, even though the preparer signs it (IRS: Topic no. 254)
Who is primarily responsible for the return's overall substantive accuracy?	A paid tax return preparer (IRS: Topic no. 254)
What must a paid preparer put on the return?	By law, their signature and their preparer tax identification number (PTIN) (IRS: Topic no. 254)
Who has unlimited rights to represent taxpayers before the IRS?	Enrolled agents, certified public accountants (CPAs) and attorneys (IRS: Preparer credentials and qualifications)

For how this choice looks to a foreign owner, see does a foreign-owned US LLC need an accountant.

Quick answers

How long should I keep my tax records?

The IRS general retention period is 3 years, unless a longer period it lists applies (IRS: How long should I keep records?). Keep records 6 years if income you should have reported but didn't is more than 25% of the gross income shown on your return. Keep them 7 years if you file a claim for a loss from worthless securities or a bad-debt deduction. Keep them indefinitely if you file no return or a fraudulent return.

Is a spreadsheet enough for Amazon seller bookkeeping?

It can be, if it meets the same test as any other system. The IRS lets you choose any recordkeeping system suited to your business that clearly shows your income and expenses (IRS: Recordkeeping). Publication 583 adds that your books must show gross income, deductions and credits, and that you must also keep supporting documents (IRS: Publication 583). It calls single-entry bookkeeping the simplest to maintain, but says it may not be suitable for everyone.

Can I keep my business records electronically?

Yes, under the same rules as paper records. Publication 583 (December 2024) says all requirements that apply to hard copy books and records also apply to electronic storage systems that maintain tax books and records (IRS: Publication 583). The system must index, store, preserve, retrieve and reproduce the electronically stored books and records in legible format.

Am I accountable for a return someone else prepares?

The IRS says you are accountable for the accuracy of every item reported on your return, even though the tax return preparer always signs it (IRS: Topic no. 254). The same page says a paid preparer is primarily responsible for the overall substantive accuracy of your return. By law, a paid preparer must also sign the return and include their preparer tax identification number (PTIN).

Where Taxller fits

Upload your Amazon settlement reports and Taxller turns them into double-entry books: sales, fees, refunds and payouts, split per payout. Our free tax calendar lists the federal deadlines for sellers and the state deadlines for 18 states, with weekend shifts applied and sources cited. Taxller never files or pays anything on your behalf: you or your accountant review and file.

Sources

• Recordkeeping (Small Business and Self-Employed)
• Publication 583, Starting a Business and Keeping Records
• How long should I keep records?
• Instructions for Form 5472
• 26 CFR 1.6038A-3 Record maintenance
• Topic no. 254, How to choose a tax return preparer
• Understanding tax return preparer credentials and qualifications