Summary
Ecommerce tax strategy changed dramatically in 2025 and most online business owners have no idea what they are missing. The Big Beautiful Bill introduced some of the biggest tax planning opportunities ecommerce sellers have seen in years, and understanding them could mean thousands of dollars back in your pocket.
Stephen Brown, COO at LedgerGurus and co-owner of Sole Toscana, sits down with Lauren Maillard, Director of Service Delivery and head of the income tax practice at LedgerGurus, to break down exactly what changed and how it applies to your ecommerce business.
Takeaways
- What Is Bonus Depreciation and How Does It Reduce Your Ecommerce Tax Bill in 2026
- How to Expense Equipment Like Forklifts and Machinery 100% in Year One
- Why Your Warehouse Does Not Qualify for Bonus Depreciation and What Does
- How to Fully Deduct R&D Costs in Year One Under the Big Beautiful Bill
- What Is the Qualified Business Income Deduction and Do You Qualify
- How S-Corps and Sole Proprietors Can Take a 20% Deduction on Net Income
- Does the No Tax on Overtime Rule Apply to Your Ecommerce Business
- Can You Deduct Car Loan Interest as an Ecommerce Business Owner
- Cash Basis vs Accrual Accounting: Which One Saves You More on Taxes
- How to Run Accrual Books and Still File Taxes on a Cash Basis
- Why TikTok Tax Advice Can Get Your Ecommerce Business Audited
- The Two IRS Rules Every Business Deduction Must Pass
What We Cover:
- 00:00 Intro and Disclaimer
- 01:29 What Is Depreciation and Why It Confuses Business Owners
- 02:27 IRS Depreciation vs Book Depreciation
- 05:08 Where Bonus Depreciation Actually Helps
- 06:19 Cash vs Accrual Accounting for E-Commerce
- 08:53 R&D Expensing Under the Big Beautiful Bill
- 10:10 Qualified Business Income Deduction Explained
- 11:10 No Tax on Tips and Overtime
- 12:42 Car Loan Interest Deduction and the Company Car Nuance
- 13:56 Why TikTok Tax Advice Is Dangerous
Guest Information
Lauren Maillard, CPA, is the Director of Service Delivery at LedgerGurus, a virtual accounting and bookkeeping firm that specializes in e-commerce and small-to-medium businesses. In her leadership role, she oversees operational accounting and specializes in e-commerce finance, channel activities, and sales tax compliance.
She actively contributes to the e-commerce accounting industry through thought leadership, appearing on industry podcasts and hosting educational webinars on e-commerce finance trends. You can connect with her or view her professional background directly on LinkedIn.
Work with LedgerGurus
Tax strategy is not a once-a-year conversation. If anything in this episode raised questions about how your ecommerce business is structured or what you might be missing, it is worth having that conversation with someone who knows the ecommerce space. You can reach Lauren and the LedgerGurus team here.
Transcript
Stephen Brown (00:00)
We just finished up the 2026 tax season. There was a huge change in 2025 with the big, beautiful bill. Let’s talk about some of those changes, how they impact e-commerce businesses and how e-commerce business owners should be thinking about their taxes going forward. Welcome to the e-commerce finance podcast. I’m Stephen Brown with LedgerGurus. Today I have with me Lauren Maillard She’s our director of service delivery and also leads our income tax practice. Welcome back to the podcast, Lauren.
Lauren Maillard (00:29)
Hey, thanks Stephen.
Stephen Brown (00:31)
Now, because we’re going to be talking about tax and there’s some real implications of tax, I am going to do a little bit of a disclaimer. This is not representing official tax legal or accounting advice for your specific business. We’re going to be talking about general principles. Anything specific, you should be talking to your tax accountant or tax advisor or tax lawyer. If you have one of those, do not use this as
authoritative advice, although we are going to be as accurate as possible. Lauren, there was a lot of changes last year with the big beautiful bill. We just went through a tax season, at least the beginning of the tax season. There’s always extensions later. But for 2025, there are a ton of changes. Let’s talk about some of those changes and how they impact e-commerce businesses specifically. First change, what would that be?
Lauren Maillard (01:05)
I think the first and biggest is accelerated depreciation.
Stephen Brown (01:29)
Let me pause you there because depreciation is a word that very few people understand unless you’ve taken some accounting courses. What is depreciation?
Lauren Maillard (01:38)
Mm-hmm.
Depreciation is essentially smoothing expenses. So when you buy something that’s really expensive, what you do is you are actually going to spread that expense over a period of time. Even if the cash has all gone out, you’re gonna use that over a period of time, and so you’re going to take the expense over a period of time.
Stephen Brown (02:05)
And historically, the IRS has said, so for example, a warehouse, a warehouse is something we see some e-commerce businesses buy. I can’t take all of the costs. Let’s say I had a big bundle of cash and I bought that warehouse all at once. I could not the cost of my tax burden.
using normal depreciation.
Lauren Maillard (02:27)
No.
Well, no. And to kind of make it clear, there’s depreciation that’s for your books. And then there’s the IRS depreciation, which is going to be different. And depreciate. Okay.
Stephen Brown (02:44)
Let’s talk about those differences real quick. So,
IRS has very specific rules about how you can apply these large asset purchases onto your profit and loss.
Lauren Maillard (02:50)
Okay
Correct. So talking about your warehouse, a warehouse is gonna normally be depreciated over 27 and a half years. So even if you paid all that cash all at once, you’re not gonna be able to actually reduce your taxable income all at once. It’s gonna be over 27 and a half years that you’re actually gonna be able to take that expense.
Stephen Brown (03:23)
Now let’s talk about book depreciation. there’s very specific rules about how you apply expenses for tax purposes, but for accounting purposes, basically for running your business, how does depreciation work?
Lauren Maillard (03:37)
So essentially it’s gonna follow GAAP rules. So GAAP is generally accepted accounting practices. And so there’s just gonna be different rules for different categories. And…
Stephen Brown (03:55)
So you’re telling me
that GAAP and the IRS are not aligned.
Lauren Maillard (03:58)
No,
they are definitely not aligned. ⁓ And we see that ⁓ with what the IRS has done with the Big Beautiful bill is that they have essentially said that there’s a ⁓ whole amount of assets that you can buy and you can accelerate the depreciation on them and take all of that depreciation upfront where on your books, so the financials that you would normally be giving
lender or a buyer, you’re still going to have to spread that depreciation out over a period of years.
Stephen Brown (04:37)
So I’m the dumb MBA. Let me translate this. I go buy a warehouse and I’m thinking, ⁓ it’s gonna reduce my taxes, but not necessarily, but the big beautiful bill added some accelerated depreciation so I can apply those expenses sooner and potentially reduce my taxable income that I owe to the IRS.
Lauren Maillard (05:02)
Yeah, so bonus depreciation, it’s not gonna actually help you with the warehouse example. if you, well, just kind of caveat, know, ⁓ if you do real estate, you can do a cost segregation study, which actually does allow you to accelerate some of the depreciation. ⁓ It’s a little bit more complicated. But let’s say you buy a tractor or a forklift for your warehouse.
Stephen Brown (05:08)
bummer. So where would it help me?
Lauren Maillard (05:31)
you you’re going to be able to expense all of that cost in year one. So that’s an immediate decrease of your taxable income.
Stephen Brown (05:37)
Okay.
So accelerated depreciation is awesome if you’re like, hey, I a good year. I’m going to know a lot of taxes. I want to make some investments in the business. I’d like to, it’d be nice if I could reduce the profits by through those investments and accelerated depreciation says, yes, you can. Here, I’m going to reduce those taxes for that asset. I don’t have to spread them out over multiple years. And which is, think,
really confusing for a business owner because like, I spent all this money. Why do I still owe taxes? And it’s because there’s these tax rules around how you spread out the costs for these large assets.
Lauren Maillard (06:19)
Yeah, absolutely. And it can be really confusing too, because as a taxpayer, ⁓ know, in e-commerce business, it could be a cash or accrual basis business. And so if you are a cash basis business, ⁓ what you expense is basically what you have paid, what you’ve bought for the most part, right? ⁓ If you’re accrual, then yeah, you’re going to have to put those big assets.
on your balance sheet and then take the expense over a period of time. But what this bonus depreciation allows you to do is to accelerate that. And so that’s pretty exciting as a taxpayer.
Stephen Brown (07:02)
Now want to ask you a question. This comes up because the US is interesting in that companies can elect how they do their accounting up to a certain point. I learned from an earlier episode that like, for example, Canada, the businesses have to do accrual accounting, but in the US we don’t have to until we get to a certain size. What is that revenue size to be able to do?
cash accounting, does a business need to be thinking about, I gotta switch to accrual?
Lauren Maillard (07:30)
it’s
It’s actually quite large. It’s ⁓ 28 million. And I think it’s an average over three years. So it’s quite.
Stephen Brown (07:38)
Hmm.
But we at Ledger
Gurus would recommend that people go to accrual accounting much, much sooner for these e-commerce businesses because you don’t know what the heck is going on with cash-based accounting due to revenue, due to inventory, due to all these other things.
Lauren Maillard (07:56)
Well, that’s the beauty of it is that for books, can look, we can do it all accrual. So we can do your books accrual and you can really understand how your business is doing, what your business health is because we’re matching your expenses with your revenues, right? So you can actually see how you’re doing. And then we can actually file your taxes cash basis.
So you can have essentially two sets of books and we don’t actually have two sets of books. We just take your accrual books and we make adjustments and adjust it to cash. And then we would file cash basis. And it’s usually preferable because you’re able to manage timing, right? So timing of expenses and then also timing of income. So it’s…
it’s a lot better to be cash basis.
Stephen Brown (08:53)
from a tax perspective. Gotcha. Okay, let’s talk about another big change. I understand that there were some things around research and development that might apply to e-commerce.
Lauren Maillard (08:54)
Absolutely.
Yeah, absolutely. So with the big, beautiful bill, you’re now able to fully expense research and development. So it’s essentially accelerated depreciation kind of, but for research and development, you’re able to take that all at once. Before it was five or 10 years, depending if it was domestic or foreign research and development. So, you know, at LedgerGurus, we’ve got quite a few supplement brands.
And so when they’re doing some research, they’re developing their product, they’re able to immediately take all of that expense.
Stephen Brown (09:39)
Awesome. And again, that allows you to reduce your tax burden against expenses that you’re experiencing anyways, and do it upfront, which I think these are great changes because it’s a huge pain if you had to spend all this money and still have to pay taxes because that had to be spread out over a longer period of time. So I love these changes a lot.
All right. Let’s talk about another change. There’s this thing called qualified business income. What the
Lauren Maillard (10:10)
qualified business income, that’s going to be the normal income from operating your business. And qualified businesses, so that’s usually an S-corp, a partnership, a sole proprietor, they’re allowed to take a 20 % deduction on net income. So it gets pretty complicated because you do have some limitations based on W-2 income.
So it’s something that you’re wanna talk to your accountant about.
Stephen Brown (10:38)
But this is like a wholesale reduction of taxable net income, which is awesome. As a business owner, I’m just like, cool. There’s that 20%, 20 % if I qualify in again, there’s a whole lot that goes into who qualifies. We don’t want to get into that here, but that’s something you definitely want to talk to your tax accountant about. What other things came up in the big, beautiful bill that you felt like were worth mentioning?
Lauren Maillard (10:46)
Yeah. 20 % taxable.
Stephen Brown (11:08)
from this last tax season.
Lauren Maillard (11:10)
Yeah, so depreciation definitely is the biggest one, but there’s ⁓ two other smaller things that might help out employees of e-commerce businesses. And one is ⁓ no tax on tips or overtime. So there are some limitations. So tips, that’s not going to really affect e-commerce sellers for the most part. That’s not going to be interesting. ⁓
Overtime, if you have employees who are working, that’s kind of interesting to not have, ⁓ well to have some limitations on ⁓ overtime. So.
Stephen Brown (11:50)
And is that both employee and employer tax? Because one of the things with payroll tax is there’s two sides. There’s the tax that the employee has to pay and there’s the tax that the employer has to pay. Did that apply to both sets of taxes?
Lauren Maillard (12:06)
that’s gonna apply to whatever’s on the W-2. So… ⁓
Stephen Brown (12:12)
Okay, so the employees taxes. Gotcha. So they get get a huge benefit by not having to pay taxes on overtime.
Lauren Maillard (12:14)
Mm-hmm.
Mm-hmm. And it’s not the full amount. It really is the amount between what they would normally make hourly and what their overtime pay is hourly. So it’s not on the total amount. They’re still paying some. Mm-hmm.
Stephen Brown (12:32)
So they’re still paying some tax. It’s just not gotcha.
And that’s the nuance of a lot of these bills. What else is there that you feel like is meaningful?
Lauren Maillard (12:42)
So another thing, so this is more for ⁓ individuals, but you also have a deduction for your car interest. So car loan interest, that was something that was added back. ⁓ Now, if you have a company car, that’s not going to be the same thing, but if you do have a personal car, that is a personal use car that is gonna be a benefit.
Stephen Brown (13:10)
Now you just talked about a very important nuance because I do see a lot of people that like to put their cars through the company. It’s a company car. So you’re saying if I were to finance a car and I’m paying personal interest, I could write it off. But if I were to run that through the business, that wouldn’t work.
Lauren Maillard (13:31)
Well, this is where tax gets super complicated. So cars actually ⁓ qualify for bonus depreciation if they’re over a certain weight limit. So if you’re going to buy a business car, go buy a big heavy business truck, you know, or SUV, and you’ll be able to write it all off immediately. ⁓ So personal use, you are still able to take that interest deduction.
Stephen Brown (13:56)
Now, obviously, as we said at the beginning, there’s a lot of nuances to taxes. Do not take what you hear from a podcast and heavens don’t take anything you hear from TikTok as authoritative tax advice. somebody, let me restate that. Our recommendation is we want people to be aware of these things so that you can have conversations with your tax accountant and say, are we using this tax strategy?
Or does this apply to me? can you tell me how to use this? What’s your general guidance for tax law changes and how to apply them? Should people be using TikTok as tax advice?
Lauren Maillard (14:39)
Oh, please no. No, no, no, no, no, no. Please, I would say that when it comes to tax strategy, the last thing that you wanna do is go to social media for any kind of advice. I’ve seen a lot of people who have come and they want to take deductions that are…
that are just would not pass IRS muster at all. ⁓ And I’ve had to really explain to people kind of what are the underlying principles behind what you can deduct. know, one of the TikTok videos that I saw, it talked about how, you know, ⁓ here’s how you can deduct your Valentine’s Day dinner, you know, talk business with your spouse, or here’s how you can deduct your Birkin bag.
we’ve had clients who have come in and they’ve been really disappointed because they really want to not have to pay any taxes at all. And what I’ve had to explain to people is that there’s really two underlying principles that I think are really important for people to understand. One is that ⁓ if something is a personal expense, it is not a deduction.
and the IRS treats certain things as inherently personal.
And then the second thing is it has to be ordinary and necessary to your business
Stephen Brown (16:06)
I think the biggest thing I want to take away from what you just said, Lauren, I see crap on social media and I’m not a tax accountant, but I know it’s wrong. Lauren is a CPA and a tax accountant and she absolutely knows it’s wrong. And people come and they see these idiots on TikTok who sound very responsible giving tax advice. And then they go back to their tax accountant and are saying, well, this person said it was.
Lauren Maillard (16:10)
huh.
Mm-hmm.
Stephen Brown (16:32)
You need to put a little bit of a filter. know we all want tax deductions, but I feel like you should put a huge filter on the accuracy of what you read and see on social media. And I get it. We’re going to publish this stuff on social media, but who is the source? Are they an accountant? Are they part of an accounting firm? Can you find them? Do they have a CPA license? Like there’s a huge difference between an influencer talking about tax.
and a CPA talking about tax. And if I were to say one key guidance from what we just talked about is you really need to be working with people who are qualified to read the tax code and apply it so that you don’t get into trouble should you get audited.
Lauren Maillard (17:16)
Yeah, absolutely. That’s some really good advice. And it causes a lot of frustration when people realize that the advice that they are hearing on TikTok or on social media isn’t actually, ⁓ well, it’s too good to be true, right? And we know what happens when something is too good to be true.
Stephen Brown (17:34)
I think that’s a great place to wrap. Lauren, if somebody wanted to connect with you about taxes, what’s the best way to do
Lauren Maillard (17:40)
the easiest way is to go through our website. So, ledgergurus.com.
Stephen Brown (17:45)
Awesome. Thanks for joining us today.
Lauren Maillard (17:47)
Thanks, Stephen.