If you file a tax return for any reason, you must report all of your income. If you have self-employment income, such as from eBay sales, of more than $400, you are required to file a tax return and report all your income, regardless of whether or not you get tax paperwork.
When you have a small business, you are required to keep accurate and reliable business records of all your income and expenses and report it on your tax return, even if you don’t get any forms or paperwork from your clients or customers. In your case, each spouse will have a separate business and schedule C in their name that reports their particular income and expenses.
how much income you have depends on what you are buying and selling. Your taxable income is the difference between the money you receive and the cost of the items. You can also subtract selling expenses such as selling fees, credit card transaction fees, and shipping. If you are only selling used household items for less than you originally paid, you won’t have any taxable income. But you will still have the burden of proof, if audited, to prove the original original cost of the items.
(I read a tax court case involving an eBay seller who made $20,000, and claimed that it was all used clothing and used household items. Because she did not have any records to show the original cost of the items, the tax court ruled that the entire $20,000 was taxable income. You do not necessarily need a receipt for a 30-year-old piece of furniture, but you need reliable business records that describe the property you are selling, including as much as you can remember about how you acquired it and what you paid, so that you can prove your case if you are audited.)
If you are buying items and selling them for more than the price you paid, then of course you have taxable income and will be required to file your return and pay taxes.
