7 tax breaks every online seller needs to know about

Tax time can be daunting, especially if you have a new business or side hustle. But there are several deductions tailormade for business owners — including entrepreneurs who run online stores.  

Many online sellers miss out on these write-offs, however, because they don't know which expenses count for a tax deduction. Even something as mundane as office supplies can qualify as a write-off. 

CNBC Select shares seven deductions online businesses can't afford to ignore — plus how to get tax support for your small business. 

If you need to buy materials to create the products you're selling, you can deduct the cost of those goods as an expense of doing business. Sell cupcakes through your online bakery? You can deduct the cost of that stand-up mixer, packaging, even the flour you use to make your treats. If you have a logo business, the wholesale cost of t-shirts, hats and coffee mugs are all deductible — and that's not all.

The cost of goods sold (COGS) includes the raw materials, inventory and labor directly or indirectly required to bring your wares to market.

You'll need to calculate the COGS for your business, which means accurately tracking and evaluating your inventory, purchases and labor. It might be worthwhile to speak to a business tax advisor or accountant for guidance, but this formula can calculate the cost of goods sold: 

Depending on what you sell, business insurance can be a prudent investment, and your premiums for commercial property, professional liability, data breach, workers' compensation, business income and general liability insurance can all be tax deductible.

Data breach insurance (also known as cyber liability insurance) is particularly valuable for online businesses that collect addresses, credit card numbers and other sensitive information from customers. 

Nationwide offers cyber liability insurance for a wide variety of industries, with useful add-ons like legal consultations and network vulnerability testing. NEXT covers data breaches, ransomware, wire fraud and hardware failures, with online quotes available in just 10 minutes. 

Staplers, paper and pens may not seem like the most glamorous tools for your online business, but they can still be deducted from your taxes. If you need to print shipping labels, handwrite 'thank you' cards or print flyers, these costs can add up over time. 

You can also deduct the cost of getting a new computer if you use it for your business. Just keep in mind that you can only deduct it for the year in which you bought it and keep all your receipts. 

If you hired a freelancer, contractor or even a full-time employee, you can claim their salaries as a tax deduction. If your business is in a place where it can afford to offer benefits like paid vacation, you can write that off, too. 

According to the IRS, compensation that is eligible for a deduction must: 

• Be a reasonable amount equal to what would typically be paid for similar services by others in the market
• Be paid to an employee, freelancer or contractor who is not an LLC member or partner in the business 
• Be paid for a service that was provided by the employee 

A business tax professional can give you a more in-depth look at how adding paid staff can impact your taxes. 

One common expense for most businesses these days — whether you run an online store or not — is software subscriptions.

Whether it's Shopify for your online store or Quickbooks for managing your bookkeeping, it's another cost of doing business — which means it's tax deductible

If you're upping your skill set or learning more about an aspect of your business you haven't mastered yet, you can usually deduct the cost of any books, workshops, courses or conferences. 

The caveat: The educational material must be directly related to your business. So, unfortunately, you can't deduct the cost of a pottery class if you sell t-shirts online. 

Unless you have a gift for free social media attention, you'll likely need to pay to promote your online business. That doesn't just mean buying Instagram ads, either: Flyers, email marketing campaigns, SMS marketing platforms, search engine ads and influencer partnership fees are all part of marketing.

Did you pay a marketing specialist to help you promote your business? That cost is deductible, too. 

If you take your business offline for a tradeshow or activation, the cost of booth rentals and other associated expenses also falls under marketing expenses.

You may have questions while you're doing your business taxes, and on-demand support can save you a lot of time and frustration. 

H&R Block offers a tax service option for small businesses, along with support options like video assistance or in-person tax help at one of thousands of branches.  

TurboTax offers plans that provide on-demand tax advice and a final review from a CPA before you file. It also offers audit support, which provides free informational assistance if you receive an IRS notice. 

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every tax article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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