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When my column on paying income tax on eBay profits ran it brought a wave of emails on whether you were required to report income earned from eBay sales to the IRS sparked a number of additional questions and comments from eBay sellers who were hoping that I could somehow validate that their eBay activities were mere hobbies instead of actual businesses and therefore not susceptible to IRS taxation.

Several folks argued that just because their little eBay hobby generated a little cash’ that didn’t make it a full blown business. It seems they consider the income from their little hobby to be financial manna from Heaven and thereby not taxable by earthly tax collectors. I’ve always been amused by folks who try to impress me with talk about their ‘little side business’ but when the subject turns to taxes they suddenly refer to it as ‘my little hobby’.

All arguments aside’ the conclusion that I came to after reading each of the emails was always the same: while you may think selling on eBay is just a fun pastime and the money you’re making is not reportable as income’ depending on the circumstances’ the IRS would probably disagree with you.

It seems that everyone likes making money’ but hates carving off a piece for good old Uncle Sam. Welcome to free enterprise’ folks. If you’re going to come to the dance you have to pay the fiddler.

The IRS rules are clear: you must pay taxes on all personal and business income and that includes money you make selling on Ebay.

In its most basic sense’ the IRS rules can be interpreted to mean that if you buy an old vase at a garage sale for $10 and sell it on eBay (or elsewhere) for $20 you made a $10 profit and therefore must report it as income and pay Uncle Sam his fair share.

In reality’ if you are a casual seller who only sells a few items on eBay every now and then it’s doubtful the IRS is going to let loose an army of agents to collect taxes on the few bucks you make. However’ if you consistently sell on eBay the IRS may deem your activities to be business oriented and you will be required to file a Schedule C and claim the income.

As mentioned last week’ the IRS uses a number of factors to determine if an eBay hobby that generates sales revenue is actually a business. These factors include:</p><p>- Do you carry on the hobby in a business-like manner?

- Do you spend considerable time working on the hobby?

- Do you depend on income from your hobby for your livelihood?

If the answer to any or all of these question is yes’ you’re running a business’ not carrying on a hobby’ and you are responsible for paying taxes on your income.

What’s eBay’s take on all this? Naturally eBay is vehemently opposed to anything that might rock the eBay boat. eBay does not issue 1099 tax forms to sellers’ nor does it report seller’s sales figures to the IRS.

Ebay considers itself merely to be a facilitator’ meaning that they provide a marketplace in which buyers and sellers come together to do business.
Furthermore’ under its current system it would be impossible for eBay to issue accurate 1099s to sellers. eBay does not track if a seller actually gets paid by the buyer’ so eBay has no idea how much money – if any – actually changes hands at the end of each transaction.

On the bright side’ if you do sell on eBay as a business you can deduct a number of business expenses’ including the cost of inventory’ listing fees’ shipping’ envelopes’ packing materials’ etc.
You might also be able to deduct things like the purchase of a computer for business use’ office space (even if it’s a home office)’ office supplies’ and more.
Talk to your accountant if there’s any doubt as to whether you should or should not be paying taxes on your eBay earnings.

Small Business Q&A is written by veteran entrepreneur and syndicated columnist’ Tim Knox. Tim’s latest books include “Small Business Success Secrets” and “The 30 Day Blueprint For Success!” Related Links:
http://www.smallbusinessqa.com

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It seems as if everyone is talking about online auctions. And why not. There are thousands of online auctions on the internet with more popping up everyday. People love them because they can usually find great bargains. Businesses are now also seeing the benefits of online auctions. Below are five ways your business can benefit from online auctions.

1. Get Rid Of Excess Inventory

You could sell your excess or discontinued products at an online auction. Your unsold inventory is doing you no good sitting around’ collecting dust. It’s an effective way to make extra income and it won’t be a total loss for your business. You could even get lucky and make a profit depending on how much people will bid for your excess inventory.

2. Test Pricing For New Products

An easy way to test new product prices is to see what people will bid for them at an online auction. First’ sell your product at three different online auctions. Next’ calculate the average selling bid from all three auctions and that will be your selling price for your new product.

3. Sell Your Products

You can get your product in front of a large audience by selling it at an online auction. Some of the bigger auction sites draw over millions of hits a year. The key to being successful is to sell your product at multiple online auctions at the same time. Let’s say you sold one product a day from just one auction site. If you sell your product at one hundred online auction sites that would be one hundred sales a day!

4. Start Your Own Online Auction

Drive traffic to your web site by starting your own online auction. People will visit your web site to find bargains and to sell their own products. You will get plenty of repeat visitors from people rebidding on products and adding new products to sell. You could also charge other businesses to advertise on your web site.

5. Lower Your Business Costs

You can find lower prices on business supplies and equipment at online auctions. I’m not saying all the time’ but before you go pay retail for a new printer try bidding on one first. A company may be selling them at a lower price at an online auction because they have excess inventory.

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Julia Tang publishes “Smart Online Business Tips”‘ a fresh
and informative newsletter dedicated to supporting people
like you. To find out the best online business opportunities’
to discover hundreds more proven and practical internet
marketing secrets’ plus FREE internet marketing products
worth over $200′ visit: http://www.best-internet-businesses.com
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We human beings naturally have two kinds of state that exist in us at any given time: peak state and off-peak state. Peak performance can be defined as “performing at your most optimal best at this time”. An off-peak state would mean that we are not performing at the optimal level.

So “optimizing your off-peak performance” simply means to convert your non-peak performance to a peak performance state.

Suppose you hold a full-time job and you do Internet Marketing part-time. By the time you got home’ you would quite likely be too tired to work on your online venture. At this moment’ you are in an off-peak state because you cannot perform at an optimal level as compared to your work rate in your primary job. By using an “off-peak performance optimization” technique’ you would be able to perform at your optimal level even though you are tired. In this scenario’ a peak state would mean that you would be able to work just as effectively during ‘off-hours’.

Regardless of any state that you are in’ whether you procrastinate or you don’t have the mood to write a special report just because you have a bad hair day’ you will be ready’ set and GO using this technique!

Now’ let’s imagine. If we could achieve X amounts of result during our peak state’ what would it be like if we can double or even triple our results just by converting our non-peak state into a peak state? The effect is mind-blowing!

This technique is called “anchoring”. An anchor is a stimulus that enables you to fire off any state that you want in an instant. A stimulus is anything you see’ hear or feel.

There are 3 kinds of anchors: visual anchor’ auditory anchor and kinesthetic anchor.

1) Visual anchors are visual sights that are neurologically linked to a particular state. Does your nasty supervisor’s face makes you feel lousy when you go to work? At the sight of your girlfriend’ do you have a wonderful feeling? Do you feel sleepy when you start reading your textbook?

2) Auditory anchors are sounds that are neurologically linked to a particular state. When someone shouts “FIRE” or “FIRE SALE!”‘ does the sound of “FIRE” make you panicky? Does hearing beautiful sounds leave you a romantic feeling?

3) Kinesthetic anchor is when someone touches you in a certain way or you move in a certain way that fires off a particular state. Do you feel loved when you are hug by your loved ones? Do you feel like laughing when a clown moves in a funny way?

Whenever you are in an intense associated state’ the state will be neurologically linked to the anchor. When this happens’ all you have to do is to apply the same anchor repeatedly and you will immediately experience the same state consistently.

Here are 4 steps to creating a powerful anchor for any resourceful state:

1) Get into an intense’ fully associated state. Think back to a time in the past when you felt a particular intense’ fully associated state. Adopt the same physiology you were in. Assuming you wanted to anchor the state of motivation to work in front of your PC (or MAC!). Think of the time you felt totally motivated and adopt the same physiology’ e.g. the same kind of sitting posture and breathing pattern when you felt totally motivated.

2) Apply the anchor at the peak of the state! A combination of an auditory and kinesthetic anchor would yield the best results’ e.g. you could snap your fingers and shout “YES!”

3) Break the state’ then repeat steps 1 & 2 at least five to ten times. Think of something else to break an unwanted state. Repeat steps 1 & 2 for five to ten times until the new anchor is successfully installed.

4) Test the anchor. Test the anchor to see whether it works. Get into the normal state and apply the anchor e.g. snap finger and shout “YES!” If it works’ the anchor is installed successfully. The best way to test the anchor would be the time when you are not feeling motivated.

In short’ “optimizing your off-peak performance” would enable you to access the resourceful state that you want instantly.

Write down 5 resourceful states that you would like to have and the 5 anchors associated with it.

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Justin Koh & Nelson Tan are the architects behind Internet Mastery Center (http://www.internetmasterycenter.com) and Fresh Resources (http://www.freshresources.com).

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