How to Reconcile Amazon 1099 in 2025

For Amazon sellers, tax season can be overwhelming, especially when trying to reconcile the 1099-K form with actual sales and payouts. 

The problem? 

Amazon’s 1099-K only shows gross sales, not net revenue, and it often doesn’t match your financial reports exactly. Fees, refunds, sales tax, and transaction timing differences all add complexity, leaving sellers frustrated and at risk of reporting errors.

Link My Books eliminates these challenges with a built-in 1099-K reconciliation tool that:

• Automatically matches transactions to your 1099-K
• Correctly categorizes fees, refunds, and sales tax
• Syncs perfectly with Xero and QuickBooks
• Prevents tax reporting errors

In this guide, you'll learn:

• How to match your 1099-K to Amazon reports
• Where to find and account for all fees and adjustments
• Step-by-step reconciliation using automation
• Ways to verify accuracy before filing

Let's start.

Where Most Sellers Go Wrong with Amazon 1099-K Reconciliation (And How to Fix It)

Most Amazon sellers assume that their 1099-K should match their Amazon payouts, but that’s a costly mistake. The truth is, Amazon’s 1099-K doesn’t tell the whole story.

Many sellers make the following errors when reconciling their Amazon 1099-K in QuickBooks or Xero:

• They assume the 1099-K shows net revenue: It doesn’t. The 1099-K only includes gross sales, meaning it does not reflect Amazon fees, refunds, or other deductions.
• They rely solely on Amazon’s reports: Amazon’s reporting system is fragmented, meaning your 1099-K, Payout Reports, and Transaction Reports often don’t match due to different timeframes and missing data.
• They forget to adjust for sales tax: Since Amazon collects and remits sales tax on your behalf in many states, you never actually receive that money, but it’s still included in the 1099-K. If you don’t account for this, you could overstate your revenue and pay more in taxes than you should.

These common mistakes lead to frustration, hours of manual work, and potential overpayment on taxes.

How Link My Books Fixes This

Instead of manually sifting through Amazon’s messy reports and trying to make sense of mismatched data, Link My Books does it for you.

• Automatically categorizes Amazon sales, refunds, fees, and sales tax to match your 1099-K properly.
• Eliminates discrepancies by reconciling transactions in real time with Xero or QuickBooks.
• Prevents tax mistakes by ensuring your revenue is recorded accurately,without overpaying.

Unlike other reconciliation methods, Link My Books doesn’t just pull your Amazon numbers, it makes sure they actually make sense.

And you can try it out for free! 🆓

Now, let’s walk through the exact steps to properly reconcile your Amazon 1099-K and make tax season stress-free.

How to Reconcile Your Amazon 1099-K 

1. Link Your Amazon Account to Xero or QuickBooks with Link My Books
2. Validate Transactions Automatically
3. Generate an Organized Summary in Xero or QuickBooks
4. Reconcile Transactions in One Click

Step #1: Link Your Amazon Account to Xero or QuickBooks with Link My Books

The first step is to connect your Amazon Seller Central account to Xero or QuickBooks via Link My Books. Once linked, Link My Books will:

• Import your Amazon sales, refunds, fees, and tax data automatically.
• Organize transactions into clear, tax-ready categories.
• Prevent missing or duplicated data that can cause reconciliation errors.

Unlike Amazon’s 1099-K, which only shows gross sales, Link My Books ensures that you have a full breakdown of net revenue, so you can report the correct taxable income.

Learn how to reconcile Amazon payments in Xero❔

Step #2: Validate Transactions Automatically

Once your accounts are connected, Link My Books will:

• Match Amazon 1099-K data with actual transactions.
• Break down Amazon fees, refunds, and sales tax separately.
• Detect timing differences to avoid discrepancies.

This eliminates the need to manually compare Amazon payout reports with your accounting software, reducing errors and saving you hours of work.

Step #3: Generate an Organized Summary in Xero or QuickBooks

After validating transactions, Link My Books automatically generates a clean summary inside Xero (or QuickBooks). This summary provides:

• A clear breakdown of revenue, fees, and taxes.
• Sales tax adjustments to prevent over-reporting taxable income.
• Data formatted exactly as needed for tax filing.

Unlike Amazon reports, which are often confusing and inconsistent, this summary is structured for easy reconciliation and tax reporting.

Step #4: Reconcile Transactions in One Click

Once your transactions are summarized, reconciliation is simple:

• Select the year you want to reconcile 
• Click “Generate”, and Link My Books will match Amazon payouts with actual bank deposits.
• The built-in 1099-K reconciliation tool ensures that every transaction aligns perfectly with your 1099-K form.
• No need for manual adjustments, spreadsheets, or guesswork.

With one-click reconciliation, you can ensure that your books are always accurate, tax-ready, and fully aligned with your Amazon 1099-K.

Make reconciliation simple with Link My Books. ✅

How Link My Books Makes Reconciling Amazon 1099-K Simple

Link My Books automates the entire reconciliation process, ensuring that your Amazon settlements match your bank deposits with complete accuracy. By categorizing sales, refunds, fees, and taxes correctly and applying the appropriate tax rates, it eliminates manual work and ensures your records are audit-proof. With just a few clicks, you can reconcile your Amazon payouts effortlessly.

But Link My Books does more than just reconciliation, here’s why it’s a game-changer for Amazon sellers:

Accurate Tax Calculations Without the Hassle

Handling VAT, GST, and sales tax can be complex, especially when selling in multiple regions. Link My Books automatically identifies and applies the correct tax rates to every transaction, whether domestic or international. This ensures that your tax reporting is always accurate, preventing missed payments, overstatements, or costly penalties.

See Your True Profitability Across Multiple Sales Channels

If you sell on platforms beyond Amazon, such as eBay, Shopify, or Etsy, you need clear insights into how each channel performs. Link My Books provides a profit-and-loss breakdown by sales channel, allowing you to:

• Compare revenue, expenses, and profits across platforms.
• Allocate resources to the most profitable sales channels.
• Get simplified reports that help you make data-driven business decisions.

Automated Cost of Goods Sold (COGS) Tracking

Knowing your real profit margins is essential for growing your e-commerce business. Link My Books automates COGS tracking, assigning inventory costs to the correct expense accounts. This means your profit-and-loss reports reflect actual profitability, giving you accurate data to make informed decisions.

Seamless Multi-Currency Reconciliation

If you sell internationally, Amazon may pay you in multiple currencies, making reconciliation a challenge due to fluctuating exchange rates. Link My Books automatically converts transactions to your base currency at the correct exchange rate, ensuring accurate financial records with no discrepancies.

Easy Setup and Scalable for Growth

Getting started with Link My Books is simple. A guided setup wizard walks you through the entire process, and free 1:1 onboarding calls are available to ensure everything is configured correctly. 

Whether you process a few orders per month or thousands per day, Link My Books scales with your business, keeping your books accurate as you grow.

Why Amazon Sellers Choose Link My Books for 1099-K Reconciliation

• Built-in 1099-K reconciliation tool ensures all sales, refunds, and fees are categorized correctly.
• Saves hours of manual work by automating transaction matching.
  Eliminates discrepancies between your 1099-K, payout reports, and bank deposits.
• Prevents tax mistakes, ensuring accurate financial reporting.
  Seamlessly integrates with Xero & QuickBooks, streamlining your bookkeeping.

With Link My Books, you don’t just reconcile your Amazon 1099-K, you eliminate the hassle of e-commerce accounting altogether.

Stop struggling with manual reconciliation. Get started with Link My Books today and see how effortless Amazon 1099-K reconciliation can be.

Start your free trial now! 🚀

Why Manually Reconciling Amazon 1099-K Payments Is Problematic

Many Amazon sellers assume that reconciling their 1099-K payments manually is straightforward, but in reality, it’s a tedious and error-prone process. The 1099-K only reports gross sales, leaving you to untangle Amazon fees, refunds, sales tax, and timing mismatches before you can accurately report your income.

Here’s why manual reconciliation creates more problems than solutions:

1. Your 1099-K Doesn’t Match Your Bank Deposits

One of the biggest frustrations sellers face is that the amount on the 1099-K rarely matches what actually hits their bank account. This is because Amazon’s 1099-K includes:

• Gross sales revenue (before any deductions).
• Sales tax collected on your behalf, which you never actually receive.
• Refunds, chargebacks, and Amazon fees, which are deducted before payouts.

To reconcile these numbers, you have to manually adjust for each of these elements, often by pulling multiple reports and sifting through transaction details.

2. Amazon’s Reports Are Confusing and Inconsistent

Amazon provides various reports, but they don’t always align:

• The 1099-K reports gross sales, not net income.
• The Payout Reports show what was deposited, but don’t explain deductions clearly.
• The Summary Report includes totals that may not match your 1099-K due to timing differences.

Since Amazon’s reporting timeframes don’t always match your accounting periods, it can take hours of manual work to track down discrepancies and ensure everything is accounted for correctly.

3. Manually Tracking Fees and Adjustments Is Time-Consuming

To get an accurate net revenue figure, you need to manually calculate and categorize:

• Amazon referral fees
• FBA fulfillment fees
• Advertising and promotional rebates
• Refunds and chargebacks
• Currency conversion adjustments (for international sellers)

Missing just one of these categories could mean reporting incorrect income and potentially overpaying taxes.

4. High Risk of Human Error

Even if you carefully track everything, manual reconciliation leaves room for mistakes. Common errors include:

• Duplicating transactions when pulling data from multiple reports.
• Forgetting to deduct sales tax collected by Amazon, which can lead to over-reporting taxable income.
• Missing refunds or adjustments, causing discrepancies between your books and Amazon’s reports.

A small mistake in reconciliation can lead to incorrect tax filings, IRS audits, and financial misstatements, all of which can be costly and time-consuming to fix.

5. It’s Not Scalable for Growing Sellers

If you’re a small seller with only a few transactions, manual reconciliation may seem manageable. But as your business grows, so does the complexity.

Manually reconciling hundreds, or even thousands, of transactions every month is not only inefficient but also unsustainable. As you scale, you’ll either:

• Spend more and more time on reconciliation, taking you away from revenue-generating tasks.
• Hire an accountant to do it for you, increasing your bookkeeping costs.

Neither option is ideal when there is accounting software that can do all this for you. 

Read more about the best Amazon payment reconciliation software. 

FAQ on Amazon 1099-K Payment Reconciliation

How often should I reconcile my Amazon 1099-K?

It’s best to reconcile your Amazon sales and payouts monthly rather than waiting until tax season. Monthly reconciliation helps you:

• Identify discrepancies early, so they don’t snowball into larger issues.
• Track revenue, fees, and refunds in real-time for better financial insights.
• Ensure your accounting software (Xero or QuickBooks) remains accurate and audit-ready.

If you're using Link My Books, reconciliation is automated, meaning you can keep your records up to date with minimal effort throughout the year.

Does Amazon report 1099-K to the IRS?

Yes, Amazon automatically reports your 1099-K to the IRS if you meet the reporting thresholds. This means:

• The IRS receives a copy of your 1099-K directly from Amazon.
• Your reported income should match or reconcile with your 1099-K to avoid audit triggers.
• Even if you don’t receive a 1099-K (because you didn’t meet the threshold), you are still responsible for reporting all sales income on your tax return.

How does Link My Books handle sales tax and VAT?

Amazon’s 1099-K includes sales tax collected from buyers, even though Amazon remits this tax on your behalf in many states and countries. This can cause sellers to overstate their income if not handled correctly.

Link My Books automatically separates sales tax (or VAT) from your revenue to ensure you:

• Do not overpay taxes by accidentally including sales tax as income.
• Maintain accurate financial records by categorizing tax amounts correctly.
• Stay compliant with VAT, GST, and other international tax regulations.

This feature helps Amazon sellers ensure their books are correct and tax-ready without extra manual adjustments.

How much do you have to sell on Amazon to get a 1099-K?

For 2024 tax reporting (filing in 2025), Amazon will issue a 1099-K if you exceed:

• $5,000 in gross sales (due to a temporary IRS delay of the lower $600 threshold).
• 200 transactions in a calendar year (in some cases).

However, certain states have lower thresholds, meaning you may receive a 1099-K even if you don't meet the federal limit.

Even if you don’t receive a 1099-K, you’re still legally required to report all income from Amazon on your tax return.

Need an easier way to reconcile your Amazon 1099-K? Link My Books automates the process, saving you time and ensuring accuracy.

Automate 1099-K Reconciliation with Link My Books

Instead of spending hours manually reconciling transactions, Link My Books automates the entire process by:

• Importing Amazon data directly into Xero & QuickBooks.
• Breaking down gross sales, refunds, fees, and taxes automatically.
• Ensuring sales tax is excluded from taxable income to prevent overpayment.
• Matching Amazon payouts to bank deposits for seamless reconciliation.

With just a few clicks, your Amazon 1099-K is fully reconciled, without errors, manual data entry, or frustration.

Try Link My Books for free and eliminate the stress of Amazon 1099-K reconciliation once and for all.