Best legal business structure for selling on eBay

silverdollarbill · Nov 15, 2018

Hello Tnet Friends,

I'm curious what everyone thinks if the best business structure for selling on eBay: sole proprietorship, LLC, S Corporation?

I found this article which is helpful but still struggling with pros and cons.

Background:
- I will most likely have between $20-$40K in annual sales (approx 75% profit)
- I have a teenage old child that will be doing all the selling: listing, packaging, etc
- Looks like underage children can earn $12K annually tax free

In this situation, what is the best structure?

thanks,
bill

Terry Soloman · Nov 15, 2018

Just get the LLC to get going. You can always restructure as an S-corp later should you require another office, vehicle, employee. You have other expenses (State Corp Agent, Attny), and be sure to figure in the shipping costs correctly down to your last foam peanut! Good Luck! :skullflag:

Holt0222 · Nov 15, 2018

silverdollarbill said:
Background:
- I will have between $20-$40K
- teenage child selling: listing, packaging.
- underage children earn $12K annually tax free

Personally I would talk to a lawyer about this one. From an IRS standpoint it will look like you are making the purchase and using the child for tax evasion.

silverdollarbill · Nov 16, 2018

@Terry....thanks for advice.

@Holt0222.....as long as you are paying the child a "reasonable" salary everything is fine. My kid is going to do 90% of the work. Im just picking.

Holt0222 · Nov 16, 2018

Is the finances staying with the child?

silverdollarbill · Nov 17, 2018

For sure. Most going to 529 college savings plan and some for spending.

MRBeyer · Nov 21, 2018

Wish my kids had caught the bug.

dognose · Nov 24, 2018

I agree with Holt0222, talk to a lawyer, after you have filed the LLC papers. Most states you can file LLC documents on line with a business credit card. Have separate personal and business bank and credit card accounts; dont mix their use.
Use good accounting software or a CPA if your not tax and software savvy. Keep written records of all miles traveled for business including dates and what the trip was for.

Don't fall for a get rich quick, as if that were possible everyone would be rich. It takes hard work, and especially for ebay. The tortoise and the hare, the tortoise will be the richer in the end.