[qikcpa]

shell have to file as self employed and pay the extra 15.3% self employment tax on any profits in addition to your regular income tax rate.

all is not lost. if she paid for stuff with a credit card or paypal account there should be a paper trail. make her finish the spreadsheet. each sale item should have a cost. difference is profit. put it all on sch c with her other expenses. heck you may find after all the dust settles and you write off the repairs to the company car she has a loss that offsets your other income and generates a refund.

moving forward she should have one credit card and a bank account that are all business income and expenses. then transfer profits to your personal account. this is not a requirement but makes some of the yearend nuts and bolts stuff easier. next step would be something like quickbooks or mint to track it for her.

strategically, if the benefits outweigh the costs, she should look at setting up an s-corp to run the profits through.