I have been in this category for three years. Here is what I have learned:
- You do not need to create a LLC and you will be responsible for showing your costs when you file under your SSN.
- Since you are keeping track of your costs, anything you spend on your business pursuits is a legitimate expense, including paypal gifts, eBay fees, grading fees, mileage expenses, hotel room stays, food, shipping supplies, office expenses, inventory storage costs and of course the product you buy.
- Keep all receipts and use them to show what your true profit is, if any, at the end of the year. It's all legit and using the government's own rules.
- You will then only be taxed on the profit that you show.
-The IRS will only send you a 1099 if you hit at least $20K in gross sales coming into paypal AND have 200 or more transactions. Good luck.
Last edited by RobertGT; 11-11-2013 at 04:07 PM.
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