AE Tax Advisors

I sell products on Amazon and through my own Shopify store. My previous accountant was calculating cost of goods sold incorrectly -- she was not including inbound freight, customs duties, or Amazon FBA fees in COGS, which understated my cost basis and overstated my profit. She also had me set up as a sole proprietor, which meant I was paying maximum self-employment tax on every dollar of profit.

AE Tax Advisors fixed the COGS methodology first. Properly including all costs associated with getting inventory to the point of sale significantly increased my COGS and reduced my taxable income. They amended two prior years with the corrected calculations.

Second, they restructured my business as an S-Corp. For an ecommerce business doing my volume, the self-employment tax savings from the S-Corp election were substantial. They set a reasonable salary based on comparable ecommerce operations and the rest flows through as distributions, free of SE tax.

Third -- and this was a bonus I was not expecting -- they set up proper sales tax compliance. I was not collecting or remitting sales tax in states where I had nexus, which was a ticking time bomb. AE Tax identified my nexus footprint and set up automated collection through my sales platforms. While this did not save me money directly, it saved me from potential state audits and penalties that could have been devastating.

Total recovery from the COGS corrections and S-Corp restructuring: $36,000. The team was thorough, professional, and genuinely understood the ecommerce business model.

If you sell products online and your CPA does not understand COGS methodology or ecommerce tax rules, AE Tax Advisors can fix the errors and set you up correctly going forward.