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MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2342
Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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Hello, I am currently selling on Ebay. I accept payments through

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Hello, I am currently selling on Ebay. I accept payments through Paypal. I receive payments that total $9000 per month. But with all my expenses, I make around $1200 a month net. I do this from home. My paypal account is not a business account but a personal one. Now would I have to file annual taxes? Or if I chose too, could I not file at all since this is not really a business?



As a US resident you are required to pay tax on your world wide income form whatever source derived unless specifically excluded by law.


Your activity on e-bay is a business because you are turning a profit. You will only be taxable on your income after expenses. However, as you are self employed, the income will also be subject to self employment tax.

MequonCPA and other Tax Specialists are ready to help you
Customer: replied 7 years ago.
So if I do not file, will I get in trouble with the IRS? Does Paypal or Ebay report me to the IRS annually? Thats basicly the only way IRS would know i'm even making a profit. And if I file, what form should I file with?



You will report your income and expenses on Schedule C on your individual return. I have included links to IRS Publicaation 334 and Schedule C to assist you.