What is a Tax Compliance Checklist for Marketplaces and Third-Party Sellers?
A tax compliance checklist organizes the recurring tasks sellers and marketplaces must complete so taxes are reported correctly and timely. It covers income reporting, sales-tax collection and remittance, vendor and payee information (like W‑9s), and reconciling platform-issued forms such as Form 1099‑K. In my practice working with marketplace sellers, a short, repeatable checklist cut year‑end surprises and reduced state audit exposure.
Quick checklist (use every quarter and before year-end)
- Record every transaction. Capture date, gross sale, fees withheld by platform, shipping, and refunds.
- Reconcile platform statements to bank deposits monthly.
- Track sales by state and marketplace channel to test for sales-tax nexus.
- Collect valid payee information (W‑9/W‑8BEN) where required.
- Review platform 1099s (1099‑K and 1099‑NEC) and reconcile to your books.
- Register and charge sales tax in states where nexus exists; file timely returns.
- Set aside money for estimated income taxes and self‑employment tax if applicable.
- Retain records for at least 3–7 years (follow IRS guidance and state rules).
Key elements explained
- Reconcile platform reports: Platforms may report gross payments and fees differently than your net deposits. Reconcile every 1099‑K and 1099‑NEC to your accounting records and explain gaps before filing. See our deeper guide on [Understanding Form 1099‑K Changes and How They Affect Small Sellers](
