<prompt> Human: Last year, I started selling some random things I had around the house on eBay to try to make extra money. My friend was doing the same thing and then later told me about some great places to buy things in person to resell on eBay. I started doing that as well, thinking maybe Id make a couple hundred bucks at most, since I was putting very little effort into this. Well, to my shock it actually worked much better than I thought it would, and 15K in sales later not all profit obviously - this is sales here - Id estimate about 80 was profit, though, now Im finding myself a bit panicked about how to handle this when it comes to my taxes. I didnt report the income last year because at that time, I think I had only sold around 500 or so. But apparently everything was supposed to be reported as taxable income, even when I was earning much less than I am now. I also recently discovered that apparently there are quarterly taxes that are supposed to be paid, too? Ive never owned a business in my life and have no idea how any of this works. This was just supposed to be some half-assed fun hobby for me to do on weekends as I work a full-time, regular job.Im not interested in hearing about what an awful, tax evading moron I am. Im just interested in how to fix this situation now that I have found myself in over my head. Obviously, I need to report my income this year on my taxes for April. But what do I do about last years taxes, and how do quarterly tax payments work? Am I going to get in some kind of legal trouble for not reporting this sooner? Do I need to register as an LLC?Assistant: I think you can forget about last year. 500 selling your own personal property is not a business. For this year, if you want to treat this like a real business, you should be keeping separate books, especially tracking your sales revenue, inventory, cost of goods sold, and business expenses. Its not necessary for you to go the whole LLC route unless your business has the potential to get you sued for a lot of money. But you should get a sales tax certificate and a reseller certificate so you can be exempt from paying sales tax on the things you buy for resale and so that eBay can collect sales tax on your behalf where appropriate.You only need to make quarterly estimated tax payments if you are likely to owe more that 1,000 in tax, and you only face penalties for underpayment if the amount of tax you paid during the year is less than 110 of last years tax or 100, depending on your income. If you received a refund last year you are most likely safe this year from any penalties. But it might be wise to start making estimated payments starting in September so you know how to do it. Google IRS instructions for 1040-ES and Schedules C and SE to get you started on the tax issues of being a sole-proprietor.Human: Thank you, super helpful response!Silly followup question, but I can be a sole proprietor without an LLC or an actual registered business since you said its not necessary to go the LLC route? Figured Id have to register my business.  <response>: You dont need to make LLC to run a business solo-LLC taxes are passed onto you anyway, but making a LLC gives you legal protection if clients decide to sue you. 