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MequonCPA
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?

DearCustomer-

 

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 2 other Tax Specialists are ready to help you
Customer: replied 8 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?

DearCustomer-

 

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.

 

http://www.irs.gov/pub/irs-pdf/p334.pdf

 

http://www.irs.gov/pub/irs-pdf/f1040sc.pdf