Can I Write This Off?

Can I write off shipping costs for customer orders?

TL;DR

Yes, you can write off shipping costs for customer orders as a business expense.

Detailed Answer

Shipping costs for customer orders are considered ordinary and necessary expenses for businesses that sell products. These costs are deductible as they are directly related to the sale of goods. However, they must be reasonable and directly associated with the delivery of products to customers. For example, if you run an online store, the shipping fees you pay to send products to customers can be deducted as a business expense. If the shipping costs are reimbursed by the customer, they should not be deducted.

Where to Put It on the Tax Form

Report this deduction on Schedule C (Form 1040) under 'Other Expenses' or 'Cost of Goods Sold' if applicable.

Real World Example

A small online retailer selling handmade crafts incurs $500 in shipping costs to deliver products to customers throughout the year. This amount is recorded as a deductible business expense on Schedule C.

Audit Risk & Documentation Tips

Maintain detailed records of all shipping transactions, including invoices, receipts, and tracking information. Ensure that the shipping costs are directly related to business sales and not personal shipments. Keep records for at least three years in case of an audit.

IRS Reference

IRS Publication 535, Business Expenses

Relevant Industries

E-commerceRetailSmall BusinessManufacturing

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 7, 2025

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