<prompt> Human: I am an ebay reseller and have grossed roughly 30k from sales with expenses of around 15k. I know that I will receive a 1099-k from PayPal but I had a few questions about filing. I buy one particular niche product and resell it at a profit from my home minimal expenses. 1 Am I reporting this as income from a business or as self employed I have no employees aside from myself? 2 Is the amount of profit just included with my total earned income W2 and spouse income?3 Are there any advantages of creating a LLC to do my selling through vs as an individual?I know I should have looked into this when I started selling but I never thought I would have ended up with this much in sales.  <response>: I dont think theres any tax advantage to creating an LLC.Your W-2 income and spouses W-2 income gets combined on your 1040 line 7.Your ebay business profit goes on 1040 line 12. Youll use a Schedule C-EZ or C to compute this profit, deducting your expenses related to reselling, such as packaging, mailing, cost of items you resell. The Social Security and Medicare taxes related to the business income are calculated using Schedule SE. Result goes on 1040 line 57. Half of that value will be used as a deduction on 1040 line 27 before you calculate your AGI and your income tax. Because of that line 27 deduction, its a good idea to work on your Schedule C first, then Schedule SE, and then finally put things together on 1040 to see the overall result.On 1040 line 64 you mention all the withholding of federal income tax that happened on your W-2 paychecks and spouses W-2 paychecks. If you made any estimated tax payments during the year in anticipation of the tax related to your ebay business, you list them on line 65. There is a chance that you might have an underpayment penalty for not having done estimated tax payments during the year. There is an escape hatch from the penalty though: if your W-2 withholding this year is more than whatever your tax was last year, you would not have the penalty. If not, the penalty is going to be based on how far shy you were from that goal. It wont be based on the huge extra influx of profit that you happened to have this year. See Form 2210 and Publication 505. 