<prompt> Human: I started selling in a very niche hobby, only to support my hobby. However the niche was ALOT larger than I ever would have dreamed and I have now sold over 30k this calendar year. Projected over 60k gross sales. Married, file jointly...I have some questions: 1 Do I have to start a business for tax purposes? 2 How should I report this income and deduct my expenses almost all paypaleBay based. 3 What other things should I be aware of? Ill likely be in a new tax bracket, even though my profit is not even 10 of my sales.I dont have any employees nor do I pay myself anything. I also do not collect sales tax. Its just me mailing boxes normally. I dont have many receipts for my expenses and most of it is cashgift based, but I do have proof of all my other expenses shipping, fuel, time, etc. Im really confused about what this means for personal finances, as this was never intended to become any sort of business nor did I expect it to take off like this. Any advice is welcome. Thank you  <response>: Do I have to start a business for tax purposes?You dont have to create a formal corporation. In some states, counties, and cities, you are required to get a business license, 2 How should I report this income and deduct my expenses almost all paypaleBay based. Schedule C-EZ or Schedule C. Turbtax.com will walk you through it and generate the correct form. 3 What other things should I be aware of?If you owe too much to the IRS and state, each entity can fine you for not prepaying enough tax. FIle estimated taxes quarterly April 15, June 15, Sep 15, Jan 15 or better yet, if you have a w2 job, increase the w4 withholding so that you will get a refund next April. I dont have many receipts for my expenses and most of it is cashgift based, but I do have proof of all my other expenses shipping, fuel, time, etc.Thats fine. If you have records of the other expenses for which youve no receipts, record them, and claim them when you file your tax return. 