All very true concerns Gretchen, Thank you. I am not sure what the level of income is for a "hobby" vs "Business" so have a conversation with your tax person before you take the plunge. Also know that this is the first year that Uncle Sam is requiring that paypal report your income to the IRS, so even ebay sellers must now register as a business for 2011. Regardless of what you do...keep accurate records. I keep monthly folders for sales, shipping, purchases, etc. ( match receipts with paperwork ), then check and re-check everything.