Can Forever stamps be used as a tax deduction or investment for my small business?

This is an interesting question! I can help clarify how this would work tax-wise for your LLC. Forever stamps are considered supplies for your business, and the tax treatment follows general accounting principles. When you purchase business supplies (like stamps), you have two options for deducting them: you can either deduct the full amount in the year you purchase them (if you qualify for de minimis safe harbor or other exceptions), OR you can deduct them as you use them. For a $25,000 purchase of stamps, you'd most likely need to treat them as inventory/supplies and deduct them as you use them, not when you purchase them. This means you'd only deduct the $16,000 worth that you actually used in 2024, and the remaining $9,000 would stay on your books as an asset until used in future years. As for the investment angle - while stamp prices do typically increase over time, the IRS would likely view a very large purchase of stamps primarily intended as an investment rather than a business expense as not "ordinary and necessary" for your business. They might question whether the quantity purchased is reasonable for your business needs.

I tried something similar with my Etsy shop! I discovered a service called taxr.ai that helped me figure out exactly how to handle my shipping supplies including forever stamps. Their system analyzed my shipping patterns and gave me personalized recommendations on how much I could reasonably deduct. I was confused about inventory vs. expense treatment too, but their AI analyzed my receipts and purchase history to suggest the most tax-efficient approach. Check out https://taxr.ai if you're trying to optimize these kinds of business deductions. They saved me from making a costly mistake with a large stamp purchase I was planning.

Just wanted to update after trying taxr.ai for my own craft business! I was skeptical initially but uploaded my Etsy sales data and shipping receipts. The analysis showed I was actually overbuying stamps and could save about $1,800 annually by better matching my purchases to actual shipping needs. Their system helped me set up a tracking method for my Forever stamps that works with my accounting software. Now I have clear documentation showing when stamps were purchased vs. when they were actually used for business mailings. The best part is I feel completely confident about how I'm handling the deductions now - no more guessing!

I had a similar issue with my small business and needed clarification from the IRS directly. After spending DAYS trying to get through their phone lines, I finally used https://claimyr.com to connect with an IRS agent. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent confirmed what others are saying here - large stamp purchases need to be deducted as used, not when purchased. But they also told me about a "de minimis safe harbor election" that might help for smaller amounts (under $2,500 per invoice). This was HUGELY helpful for my tax planning. I would never have gotten this info otherwise since the IRS wait times are insane!

I owe everyone an apology - especially Profile 17. I was really skeptical about Claimyr and called it a scam... but after waiting on hold with the IRS for THREE HOURS yesterday and getting disconnected, I was desperate enough to try it. Not only did it work, but I got through to a surprisingly helpful IRS agent who explained exactly how to handle my situation with a large purchase of shipping supplies (including stamps). They confirmed I need to track usage and depreciate anything I don't use in the current tax year. The agent even emailed me documentation about de minimis safe harbor elections that might help with smaller purchases. Lesson learned - sometimes services that sound too good to be true actually deliver. Sorry for the skepticism!

Former USPS employee here! Just want to chime in that buying thousands in Forever stamps as an "investment" isn't really a great financial move. Yes, stamp prices go up, but usually just by a few cents every year or two. The current rate of increase is way below what you'd get from most other investments. Plus there's the hassle factor - you'd have to store and manage thousands of stamps, and if they get damaged or lost, that's money down the drain. Not to mention the opportunity cost of tying up thousands of dollars. If you're genuinely using them for business, buy what you reasonably need, but I wouldn't go overboard just to "invest" in future postage increases.

OK, small business tax advisor here who specializes in e-commerce. Everyone's given good advice, but I want to clarify one thing: What matters is your ACCOUNTING METHOD. If you use the cash basis accounting method (most small Etsy/Amazon sellers do), then you generally deduct expenses when you pay them. BUT supplies that create an asset with usefulness beyond the tax year are an exception. Forever stamps absolutely fall into that category since they don't expire. You need to deduct them as you use them, regardless of when you bought them. This is called the "12-month rule" in tax speak.

Thanks everyone for all the detailed responses! This has been incredibly helpful. Based on what I'm reading, it sounds like my original idea of buying $25K worth of stamps was way too aggressive and would likely raise red flags with the IRS. I think I'll stick closer to what Miguel and Zainab suggested - maybe buy 6-12 months worth at a time based on my actual usage patterns. Last year I spent about $10K on postage, so maybe I'll do a $5K bulk purchase of Forever stamps at the end of this year and track usage carefully. The storage concerns Miguel raised are definitely something I hadn't considered either. I live in Florida so humidity is always an issue - definitely don't want thousands of dollars worth of stamps getting ruined! Has anyone used a specific system or app to track stamp usage over time? I want to make sure I have good documentation in case of an audit.