eBay selling needing tax advice

[divsnowball]

I have been a seller on eBay for a long time and only recently have I started taking it more seriously and bringing in a more serious amount of money (a few thousand a month) and I am unsure how to handle this income for tax purposes.  I have read about paying quarterly estimated tax payments and filing a schedule C.  Has anyone out there reported selling income or any type of side income, and how did you handle it?  What tools did you use? ie. Turbo Tax, etc.

Thanks!

[MissStache]

I'm curious about this, too.  I had no tax burden on my business last year because it technically lost money, but it will be in the black this year.  My understanding is that if you didn't owe taxes in the previous year that you don't have to pay quarterly taxes in the current year.  I hope that is correct and that I don't need to worry about this until next year, but it makes me nervous!

[seattlecyclone]

You won't owe a penalty if your paycheck withholding and any estimated tax payments add up to at least 100% of last year's tax (or 110% if your income is over $150k).

Next year, if you can increase your paycheck withholding to cover 100% (or 110%) of this year's tax, you won't need to worry about estimated payments. Otherwise you'll have to send some money to the IRS every quarter.

[Cathy]

Not all "side income" is alike. The first question is whether your eBay dealings are (i) capital transactions or (ii) a trade or business. It is also possible that the nature of the activity has changed over the years. (Note: Capital transactions are still taxable.)

I don't feel like analysing any other issues present here at this time.