Shopify Tax Planning | The Essential Pre-Meeting Checklist

Tax Planning is an important part of owning an e-commerce business. When strategizing for your tax year, tax planning and financial planning coincide to place you in the best possible position for your taxes. Tax planning starts with your AGI or your adjusted gross income. The higher your AGI the more you will owe. On the contrary, the lower your AGI the less you will owe. The goal of tax planning is to reduce (legitimately of course) your AGI in order to reduce the amount you owe. You can achieve this by contributing to retirement accounts, taking advantage of deductions, and by recognizing losses. You can also get your taxes down by taking advantages of tax credits and rebates. Making estimated tax payments and saving money is another part of tax planning, no matter what kind of business you have. Particularly, if you operate an e-commerce business on Shopify, then you need to sit down with a Shopify tax accountant.

Your CPA or Tax Accountant Will Ask You To Be Prepared With These Items



You can prepare to meet with your CPA or Shopify tax accountant by gathering the necessary documents ahead of time. This makes the whole process go a lot smoother. Here are some items your Shopify tax accountant may ask for:

  • Income statements for your business including: balance sheets, profit and loss statements, and cash flow statements. This should also include your Shopify sales reports.Shopify tax accountant
  • Business expenses like rent, mortgage, utilities, travel, and operating costs including Shopify subscriptions fees, shipping charges, transactions fees if you don’t use Shopify payments, domain fees, and one time app fees.
  • Copy of last years tax returns.
  • Last years notice of assessment.
  • List of quarterly payments made.
  • Payroll information if you have employees.
  • List of assets such as vehicles or machinery.


Your Shopify tax accountant will also need to know if you operate your business as an LLC, corporation, or sole proprietorship. As an e-commerce business, you may conduct business in other states and jurisdictions. Let your accountant know, as different states have different laws regarding sales tax. Investment contributions and interest income will need to be discussed. In addition, additional payments like medical expenses, child support, alimony, and charitable donations will need to be taken into account.


Gather Necessary Tax Forms Such As 1099’s, W2’s, Past Returns, Expenses, etc…


Shopify tax accountant

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Having the necessary forms like: 1099’s, W2’s, and past tax returns, readily available can make your tax planning session a lot easier. Having a filing system in place where you keep all of the information you will need for your taxes save you a lot of time. In addition, it is also a good idea to have a system in place to keep track of your expenses. Whether you are using a simple Excel document or software program, keeping track of your profits and expenses as they occur helps create a profit and loss statement for your business, which you need to file your taxes.


How to Download 1099 from Shopify

Shopify makes gathering the necessary information easy for e-commerce business owners. Shopify will issue a 1099 to store owners and the IRS when a store hits 200 transactions and 20K in sales. 1099’s are available to download in the payments section. View payouts, then select documents to download. Please note, that if a 1099 is issued, it is very important that the number reported on your tax return matches the number on your 1099.

Run Sales Reports from Shopify

Shopify tax accountant

Image Credit: Shopify Help,

Shopify owners can also run sales reports by going to analytic reports, then selecting sales reports. From there, you can select the sales report you want. The sales over time report allows you to specify the dates for which you want to run the report. For example, if you are meeting with your tax accountant on a quarterly basis, you can run quarterly sales reports right from Shopify. Please note, that these reports are only available if you are on the Shopify plan or higher.


When generating a profit and loss statement, you must keep track of your expenses throughout the year. You will need to keep track of vendor invoices, receipts, and amounts collected throughout the year. If you’re on a cash basis of accounting then you will add up all your expenses incurred during that year. If you’re on an accrual basis of accounting, then you track expenses such as the cost of the goods for the products that were sold.

For smaller operators, Expensify is a great option for keeping track of expenses, and it seamlessly integrates with Shopify. With Expensify purchases made with registered cards are automatically logged and categorized. You can also photograph receipts, and Expensify matches them to the correct category. For larger operators we recommend integrating Quickbooks with tools such as A2X to streamline inventory purchases and management.

Having the necessary documents readily available when meeting your Shopify tax accountant will save a lot of time. Tax planning takes careful consideration and attention to detail. You want to avoid any mistakes that could involve leaving money on the table or result in costly penalties. The more organized and prepared you are the better. This saves you time and money, which you can ultimately put back into your business.


Why You Should Work with a Shopify Tax Accountant

There are different reasons why an e-commerce business may want to partake in tax planning. Tax planning can help businesses achieve short term and long term financial goals, which helps them grow their business and maintain economic stability. Tax planning helps businesses reduce their tax liability in a legal way. Working with a professional Shopify tax accountant is the safest way to take advantage of the benefits from tax planning.  There are many ways to legally reduce ones tax bill. However, always proceed with caution, as tax evasion is a different story. If you have doubts, you should hire a professional. Our firm specializes in tax planning and can help you form the best plan that places your business ahead of the game. To learn more or to schedule your strategy session contact us today!

Being Prepared Will Save Your Time & Money – Click Here To Learn More!

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