Upgrading to a Business Account Questions

[cantocardcollector]

Hello, I want to run my eBay account as a sole proprietorship. If I change my personal account to a business account now, does all of my 2024 transactions (transactions that occurred prior to the date that I switch to business account) be accounted for in the business account? Or do those transactions remain as part of the personal account? This is important as I want to understand how that would affect tax filing for 2024. 

[dnasilver]

Without knowing your overall finances nobody can give you a definite answer. It would be best to consult a CPA or Tax Attorney. Starting a business today would mean anything prior is mute to that business. But since you are talking about a sole proprietorship a CPA or Tax Attorney may say you have been operating that way already. Best to consult a pro though. 

[stainlessenginecovers]

Changing from Personal to Business doesn't change a thing from either your ebay account perspective (previous feedback/sales etc. will STILL show), or your tax perspective or how you file IF you are going to JUST BE a 'Sole Proprietor'.  

You will be paying 15% (rounded) in ADDITIONAL Taxes for "Self Employment Tax" (which then 50% of that amount is a tax deduction. You can write off fees, shipping etc. along with possibly other things so you will want to have someone do you taxes. 

That 15% would be whether you have a business account or a personal account with ebay, does NOT matter.

The 'other types' of business that would change the way you do taxes is a Corporation, LLC, Partnership etc. which would have nothing to do with you at this time. 

[slippinjimmy]

Just to confirm what @stainlessenginecovers said.

Virtually nothing will change with your account by changing to a business account. If you are just a Sole Proprietor you will still receive payments under your SSN so nothing changes tax wise either for 2024 or any years in the future.

[winterpalace25]

You already are a business account if you are reselling. Hopefully, you are already filing Schedule C with your 1040 taxes.

Now, this is all different if you are in the UK. Are you? Their Business Account is required if you list over a certain number, and is taxed and handled differently than a Personal Account.

[slippinjimmy]

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@winterpalace25 wrote:

You already are a business account if you are reselling. Hopefully, you are already filing Schedule C with your 1040 taxes.

Now, this is all different if you are in the UK. Are you? Their Business Account is required if you list over a certain number, and is taxed and handled differently than a Personal Account.

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The OP is not a UK seller and you don't become or need to switch to a (eBay) business account simply because you sold something.

[chapeau-noir]

I've never had a business account and have been a sole proprietor for over 10 years.