Tax Deductions Every Pokemon Card Seller Should Know

Tax season used to stress me out more than pulling a white code card from a booster pack. For the first two years of running Break Check Barragan, I left thousands of dollars on the table simply because I didn't know what I could deduct. Now, after 10+ years and working closely with a tax professional who understands resale businesses, I've built a system that saves me between $4,000 and $7,000 every single year. Let me walk you through every deduction you should be claiming.

Cost of Goods Sold (COGS) - Your Biggest Deduction

This is the foundation of everything. Every dollar you spend acquiring inventory is deductible against your revenue. If you bought a collection for $2,000 and sold cards from it for $5,500, your taxable income from that transaction is $3,500, not $5,500.

COGS includes:

• Individual card purchases from shops, collectors, or online platforms
• Sealed product purchases (booster boxes, ETBs, tins)
• Collection buys (even partial collections)
• Auction purchases including buyer's premiums

Pro Tip: Keep every single receipt. I photograph receipts on my phone immediately because thermal paper fades. For cash transactions at flea markets or meetups, I write a simple receipt with the date, amount, description, and seller's name. That piece of paper has saved me hundreds at tax time.

Shipping and Platform Fees

These add up faster than most people realize. In 2024, I spent $4,200 on shipping supplies and postage alone. Every penny of that is deductible.

Shipping deductions include:

• Postage (stamps, USPS labels, UPS/FedEx charges)
• Bubble mailers, padded envelopes, and boxes
• Tape, labels, and packing peanuts
• Toploaders, penny sleeves, and team bags used for shipping
• Scale for weighing packages

Platform fee deductions include:

• eBay final value fees (typically 13.25%)
• TCGPlayer seller fees
• Mercari selling fees
• PayPal or payment processing fees
• Monthly store subscription fees (eBay Store at $21.95/month is $263.40/year)

I tracked my eBay fees alone last year and they totaled $3,860. That's a massive deduction that directly reduces your taxable income.

The Home Office Deduction

If you dedicate space in your home to your Pokemon business, you can deduct a portion of your housing costs. This was a game-changer for me.

Two methods to calculate it:

Simplified Method

Multiply your dedicated square footage (up to 300 sq ft) by $5. Maximum deduction: $1,500/year. Easy, no complex calculations.

Regular Method

Calculate the percentage of your home used for business. My card room is 200 sq ft in a 1,600 sq ft house, so 12.5% of my mortgage interest, property taxes, utilities, insurance, and repairs are deductible. This method gave me a $3,200 deduction last year versus $1,000 with the simplified method.

The key requirement: The space must be used regularly and exclusively for business. My spare bedroom is my inventory room with shelving, a packing station, and my photography setup. I don't use it for anything else. If you sort cards on your kitchen table, that likely doesn't qualify.

Vehicle and Travel Deductions

Every mile you drive for business purposes is deductible. I drive to source inventory from local shops, attend card shows, meet collection sellers, and make post office runs. In 2024, I logged 4,800 business miles.

Standard mileage rate for 2025: $0.70 per mile. That's $3,360 in deductions just from driving.

Travel deductions for conventions and card shows:

• Hotel stays for out-of-town events
• Flights or gas for long-distance shows
• Meals during business travel (50% deductible)
• Convention entry fees and table rental costs
• Parking and tolls

I attended three major card shows last year. Between hotel, gas, meals, and table fees, that was another $2,100 in deductions. Check out our guide on tax fundamentals for Pokemon businesses for the basics if you're just getting started.

Equipment and Technology

Everything you use to run your business counts. Here's what I've deducted over the years:

• Camera or smartphone (business-use percentage if also personal)
• Computer or laptop used for listings, research, and bookkeeping
• Printer for shipping labels and invoices
• Ring light and photo backdrop for card photography
• Storage supplies (binders, boxes, shelving units, filing cabinets)
• Card protection supplies used for inventory (sleeves, toploaders, magnetic cases)
• Software subscriptions (inventory management, photo editing, accounting software)

Important note: For items that serve both personal and business use, like your phone or computer, you deduct only the business-use percentage. I estimate my phone is 60% business use (photos, marketplace apps, customer messages), so I deduct 60% of my phone bill and 60% of the phone's cost.

Education and Professional Development

This one surprises people, but it's legitimate. Anything you spend to improve your business skills is deductible.

• Online courses about reselling, ecommerce, or card grading
• Books on business, marketing, or the Pokemon market
• Membership fees for trade organizations or seller communities
• Conference tickets for business or industry events
• Subscriptions to pricing guides or market analysis tools

I spent $350 on courses and books last year, plus $120 on pricing tool subscriptions. Every dollar deductible.

Often-Missed Deductions That Add Up

These are the ones most Pokemon sellers overlook entirely. Don't leave this money on the table:

• Internet bill (business-use percentage, typically 30-50%)
• Phone bill (business-use percentage)
• Business insurance (if you carry inventory or liability coverage)
• Bank and credit card fees (monthly fees, wire transfer charges)
• Grading fees (PSA, BGS, CGC submission costs - these are COGS or business expenses)
• Return shipping costs when accepting returns
• Advertising costs (promoted eBay listings, Facebook ads, business cards)
• Professional services (tax preparation, legal consultation, bookkeeping)

My grading fees alone were $1,400 last year. Bank fees added another $180. Internet and phone business portions totaled $960. That's $2,540 in deductions most hobbyist-turned-sellers would completely miss.

Building a Tracking System That Works

You can't claim what you can't prove. Here's the system I use:

Digital Receipt Management

I use an app to photograph every receipt immediately. Paper receipts fade, get lost, or go through the wash. Digital copies organized by month save you when it's time to file.

Expense Spreadsheet

I maintain a simple spreadsheet with columns for date, description, category, amount, and payment method. Every expense gets logged within 48 hours. Doing it weekly takes 20 minutes. Doing it at tax time takes 20 hours and you'll miss things.

Mileage Log

I use a mileage tracking app that runs in the background when I drive. It records date, starting point, destination, miles, and purpose. The IRS wants documentation, not guesses.

Separate Bank Account

This is non-negotiable. If you don't already have a dedicated business bank account, read our post on separating personal and business money. It makes tracking infinitely easier and looks professional if you're ever audited.

When to Hire a Tax Professional

I did my own taxes for the first three years. Then I got audited on a minor issue and realized a $300 tax professional would have prevented $1,200 in headaches. Here's when it's time to hire help:

• Your annual revenue exceeds $20,000 - complexity increases significantly
• You have inventory worth more than $10,000 - valuation rules matter
• You're unsure about COGS calculations - getting this wrong is costly
• You're claiming home office deduction - the regular method has nuances
• You received a 1099-K - you need to properly reconcile it

A good tax professional who understands resale businesses costs $300-$600 and typically saves you far more than their fee. Mine found $2,200 in deductions I'd missed in our first year working together.

For a full breakdown of record-keeping best practices, check out our guide on legal record keeping for your card business.

The Bottom Line

Track everything. Deduct everything legitimate. Get professional help when you need it.

The difference between Pokemon sellers who thrive and those who wonder where their money went often comes down to tax strategy. These deductions are your legal right as a business owner. Use them.

Next Read: Separating Personal and Business Money - The foundation that makes all of this tracking possible.