Maybe I have it easy being an accounting major in college. I just write up a profit and loss statement in excel, and total it up at the end of the year. If you don't have excel use google documents with the spreadsheet feature. Its great even if you aren't paying taxes to know how much your income/expenses are for doing cards. Then at the end of the year, you include your ebay income as miscellaneous income on your 1040 form. I've been doing that for a couple years now. You can also claim the 100% of the business expenses if you make a profit on the cards for a couple of years. If you have never made a profit, it goes to a hobby loss. As my tax professor always said: Tax is on any income that you make. Although there are limits (Lottery ticket winnings over $500, or hobby income of over $500.00) you can still enjoy selling cards. The government just wants their cut.
Just one thing to note, At first when i started writing up profit/loss statements on my hobby, I began to realize how much money I was spending on cards, where my expenses need to be cut. So now I can run my hobby sales more efficiently and provide a better service to my customers.
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