What records should a reseller keep for the IRS?
The IRS doesn't require a particular kind of records: you can use any system that clearly shows your income and expenses, as long as supporting documents such as receipts, invoices and statements back up each entry. For inventory you buy to resell, IRS guidance says those documents should identify the payee, the amount paid, proof of payment, the date and a description showing the amount was for purchases.
General information from IRS sources, not tax advice. It doesn't say what you should file; check with a tax professional about your own situation.
Checked against the IRS pages listed below on .
What the IRS says
"Except in a few cases, the law does not require any specific kind of records. You can choose any recordkeeping system suited to your business that clearly shows your income and expenses."
"Your supporting documents should identify the payee, the amount paid, proof of payment, the date incurred, and include a description of the item to show that the amount was for purchases."
"Proof of payment of an amount, by itself, does not establish you are entitled to a tax deduction."
"If you cannot get a receipt for a cash payment, you should make an adequate explanation in your records at the time of payment."
The records the IRS lists, matched to reselling
Publication 583 sorts supporting documents into a few groups. The first two columns are the IRS's; the last is how the same group usually looks for an online seller.
| Group | Documents the IRS lists | What that usually is for a reseller |
|---|---|---|
| Gross receipts | Cash register tapes, bank deposit slips, receipt books, invoices, credit card charge slips, Forms 1099-MISC and 1099-NEC | Each selling app's sales and payout reports, any Form 1099-K, bank deposits, a receipt book for cash sales at a market or show |
| Inventory | Canceled checks, cash register tape receipts, credit card sales slips, invoices | Thrift, estate-sale and auction receipts, wholesale or lot invoices, and the card or bank statement that shows the payment |
| Expenses | Canceled checks, cash register tapes, account statements, credit card sales slips, invoices, petty cash slips for small cash payments | Platform fee statements, shipping label history, supply receipts, software subscription invoices |
| Car and truck | For each business use, the mileage, the date, the business destination and the business purpose, plus the total miles for the year | A log of sourcing runs and post office trips |
| Assets | When and how you acquired the asset, purchase price, improvements, section 179 and depreciation deductions, how you used it, when and how you disposed of it, selling price, expenses of sale | Records for a label printer, computer, shelving or a vehicle used in the business |
Proof of payment is only half of it
Publication 583 accepts some account statements in place of a canceled check. A credit card statement has to show the amount charged, the payee's name and the transaction date; an electronic funds transfer statement has to show the amount transferred, the payee's name and the date the transfer posted.
That shows you paid. It doesn't show what you bought. Publication 583 says proof of payment by itself doesn't establish a deduction and suggests also keeping documents such as credit card sales slips and invoices, and the IRS's records page notes that a combination of supporting documents may be needed to cover every element of a purchase.
Scanned receipts and bookkeeping software
The rules for paper records apply to electronic ones. Publication 583 says an electronic storage system has to index, store, preserve, retrieve and reproduce the records in legible format, and points to Revenue Procedure 97-22 for the details. Paper originals may be destroyed once the system has been tested to reproduce them in compliance with IRS requirements and procedures are in place to keep it compliant.
Bookkeeping software works too. Publication 583 says the computer records have to reconcile with your books and return and carry enough detail to identify the underlying source documents.
A separate business account
Publication 583 suggests opening a business checking account and keeping it separate from your personal account, depositing all receipts into it, and noting the source of each deposit and the type of each expense. It also says to avoid writing checks payable to cash.
Worked examples
A $47.18 thrift-store run
You pay $47.18 by card for nine books to resell. The card statement shows the payee, the amount and the date; the itemized receipt shows what you bought. Kept together, they cover the elements the IRS lists for purchases. If you track cost per item, the run works out to $5.24 a book ($47.18 divided by 9, rounded).
Cash at a yard sale, no receipt
You pay $20 cash for a box of 40 DVDs and the seller has no receipt. Publication 583 says to make an adequate explanation in your records at the time of payment, so the note written that day might read: the date, the address, $20 cash, 40 DVDs for resale, $0.50 each.
Edge cases
- If you run more than one business, Publication 583 says to keep a complete and separate set of records for each one.
- Car expenses have their own record rules in Publication 463. It says a record made at or near the time has more value than one prepared later, and a log kept weekly counts as timely.
- If you have employees, the IRS says to keep employment tax records for at least 4 years after the tax becomes due or is paid, whichever is later.
- A Form 1099-K reports gross payments. Your own sales, fee and refund records are what connect that gross figure to your profit: see what to do if a 1099-K looks wrong.
What to do
- Save each selling app's annual sales, fee and payout reports when the year closes, next to any Form 1099-K. Where each app keeps its reports.
- For each inventory buy, keep the itemized receipt and the card or bank statement that shows the payment.
- For a cash buy with no receipt, write the note the same day: date, place, amount and what you bought.
- Keep a mileage log as you go if you drive for sourcing or shipping.
- If you scan receipts, keep the scans indexed and legible before any paper goes.
- Check with a tax professional about what your own records need to show.
Questions
Is a credit card statement enough proof for a thrift-store purchase?
It proves payment if it shows the amount, the payee's name and the transaction date. Publication 583 says proof of payment by itself doesn't establish a deduction, so the itemized receipt or an invoice is what shows the purchase was inventory.
Do I need special bookkeeping software?
No. Publication 583 says that except in a few cases the law doesn't require any specific kind of records. If you use software, its records have to reconcile with your books and return.
Can I throw away paper receipts after scanning them?
Publication 583 says originals may be destroyed once your electronic storage system has been tested to reproduce them in compliance with IRS requirements, with procedures to keep it compliant. Revenue Procedure 97-22 has the details.
How long do I keep all of this?
Generally until the period of limitations for the return runs out, which is usually 3 years. The longer cases are on how long to keep tax records.
General information, not tax advice
This page summarizes IRS publications, instructions and guidance as read on . It doesn't say what you should file or deduct. Tax rules depend on your facts, and state rules aren't covered here (see state rules). Check with a tax professional.
Sources
Every figure, rule and quote on this page comes from one of these official pages.
- Publication 583 (12/2024), Starting a Business and Keeping Records (IRS, page reviewed or updated Apr 30, 2026; read Oct 19, 2026)
- What kind of records should I keep (IRS, page reviewed or updated Aug 3, 2026; read Oct 19, 2026)
- Recordkeeping (IRS, page reviewed or updated May 1, 2026; read Oct 19, 2026)
- How long should I keep records? (IRS, page reviewed or updated Jun 30, 2026; read Oct 19, 2026)
- Publication 463 (2025), Travel, Gift, and Car Expenses (IRS, page reviewed or updated Apr 30, 2026; read Oct 19, 2026)
Free 1-page Reseller Cheat Sheet: fees on 8 platforms, Media Mail and stamp prices
What each platform takes from a $10, $25 and $50 sale, Media Mail 1-10 lb, Ground Advantage to Zones 1, 5 and 8, and the Forever stamp, on one printable page. The link appears as soon as you sign up.