Tag Archive for taxes

If you’ve never bartered, you’re missing out!

Originally at http://genxfinance.com/barterquest-how-to-barter-everything-you-need-without-spending-a-dollar/

If you’ve never bartered, you’re missing out. Bartering allows you to acquire goods and services without the exchange of money. Here’s how it works. You’re a writer in need of a good laptop. Instead of purchasing one new or secondhand, you find one through BarterQuest, a cashless trading site. You complete your profile, list what you “WANT”, and add writing to the list of services what you “HAVE”.

People with laptops that need writing done for their businesses, can contact you through the site and make an offer. Once you’ve found a suitable laptop, you can make a counteroffer and agree on what you would be willing to write in exchange for the electronic. The other member then agrees to your counteroffer and accepts it. You then make your exchange.

Verify Your Account for Added Security

Every member must go through the verification process before trading. This ensures that everyone on the site has good intentions and will follow through with their exchanges. The onetime fee for verification is $9.99 which is a small price to pay for years and years of bartering. To learn more about the verification process, refer to the BarterQuest FAQ page.

Benefits of Bartering

In addition to being a useful way to acquire goods and utilize services without earning and exchanging money, bartering also offers the following benefits:

1. Provides you with warm sense of community and purpose.
2. Gives you the satisfaction of knowing that useful items are not going to the dump and winding up in the landfill.
3. Offers you the opportunity to build your skill set.
4. Allows you to make use your talents and encourages you to pursue interests that you might not otherwise be able to afford.

Regular barterers agree that a cashless system of exchange is not only better but more enjoyable.

When Bartering Becomes Taxable

Bartering becomes taxable in areas of the United States and Canada if the goods and services that you receive are worth $100 or more. You can refer to IRS.gov for more information about reporting bartering as “income” on your taxes.

Bartering is a great way to stretch your dollars. You acquire the goods and services that you need to make your life easier which frees up your income for other things. Bartering also supports the local economy, allows people to showcase their skills and talents, and keeps goods from the garbage. It’s a win-win situation for all parties involved.

The Five Most Important Things to Do Before Jumping Into a Bartering Arrangement

Posted on: 29th March, 2010
Originally posted by Alyssa Gregory
http://www.sitepoint.com/blogs/2010/03/29/bartering-considerations/

Bartering is the exchange of goods or services for the goods and services offered by someone else. Money typically doesn’t change hands, provided the value of the exchange is deemed equivalent. Bartering can be a good way to get experience when you’re just starting out, fulfill a need without a financial investment, expand your network and find new business.

While it can seem like an informal situation, there are potential damaging consequences that can occur if you don’t do certain things to protect the bartering arrangement. Here is a checklist of the most important steps you should take before beginning a bartering relationship.

barter-checklist

Evaluate the Value

You want to make sure the arrangement isn’t lopsided, and that both parties are getting what they put into it. A mismatched barter can result in resentment, frustration and potentially even legal issues. To start, assign a dollar value to the goods or services that are to be traded. If there isn’t an even comparison, adjust the trade to make it comparable (i.e. trade 5 hours of a service A for 8 hours of service B).

Check References

Do your research into the person you’re considering bartering with, just as you would if you were hiring them to do something. Ask for references, check past work, dig into who they are and verify they have the skills and experience they are claiming. Just because bartering doesn’t involve money doesn’t mean it should imply discounted or less professional services, and you’ll save yourself a huge headache by verifying this in the early stages.

Use a Written Agreement

Again, just like any other business relationship, you should have a written agreement that explicitly outlines the terms of the arrangement. This is especially important when there isn’t a clear one-for-one exchange. Your agreement should outline the scope of the work on both sides, identify the deliverables, specify the duration or deadline for the work and spell out what happens if either side wants to end the arrangement before completion.

Keep Open Lines of Communication

Stay in the loop with your bartering partner to ensure that the trade is effective and that both sides are happy with the service they’re getting. If something isn’t working out as expected, or if you’re unhappy with the work you’re receiving, speak up and work toward a resolution. It’s also a good idea to schedule regular check-ins and milestones to make sure the bartered services don’t get dropped below paid work and forgotten.

Don’t Forget About Taxes

The rules for reporting barter transactions may vary depending on which form of bartering takes place and where you are located. According to the IRS, in the U.S. barter dollars are identical to real dollars for tax reporting, so you need to treat barter income as you would any other business activity. Keep good records and consult an accountant if you have questions or need advice.

Bartering Resources….

Posted on December 14th, 2009
Original posted by: Alexander Fowler

http://www.thebizownerblog.com/index.php/2009/12/14/barter-resources/

resources

Here are some useful resources for those looking to get started with barter.

1. Barter Agreement

When we barter through Geektime, we ALWAYS use a barter agreement. You can download the sample barter agreement (in PDF form) that we use from this site. It’s a simple one page template we found on the Internet, but it spells out who is bartering, what is being bartered and creates an official record of your trade.

2. Barter Sites

There are a number of free barter sites on the Internet, in addition to professionally managed barter clubs or barter circles. Keep in mind that the professionally managed clubs charge a fee, but handle all of the administrative paperwork AND open up a larger network of potential partners. Here’s a list of some of the freebies, (try searching for your barter clubs or barter circles in your city or region for a list of the barter networks):

  • Craig’s List – the online classified giant has a free barter section for each region in which it operates.
  • BarterQuest – a well designed interface designed to match up partners based on “wants” and “haves”. Easy to use and search.
  • U-Exchange – a no frills bulletin board system with filtering and search capabilities.
  • FavorPals - very similar to U-Exchange, with time and date stamps to indicate freshness.

3. Tax Information

Don’t forget the IRS. They want to be paid on any and all compensation you receive, including bartered goods and services. Topic 420 on the IRS website covers bartering income from their perspective.

If you have any information you’d like to add, please comment. Happy Bartering!

Barter and Taxes

We recognized that a lot of people are very concerned about bartering and taxes. They even consider barter as illegal. But it isn’t. There are some parts of bartering, especially in cases of trading with services, where small businesses have to mention their exchanges in their tax computation. we are actually no expert in terms of taxes either. who actually is? But we did find some helpful information of the IRS, where you can print out a form to make sure you follow the rules of Uncle Sam.

Another great source of information is this video by CNN, where they describe bartering and different tax implications.

CNN

Do You Need to Report a Barter Exchange?

original post by Sandra A. Parks

Bartering is the trading of one product or service for another. Usually there is no exchange of cash. Barter may take place on an informal one-on-one basis between individuals and businesses, or it can take place on a third party basis through a modern barter exchange company.

Bartering is the most ancient form of commerce. While our ancestors may have exchanged eggs for corn, today you can barter computer services for auto repair.

Another example of a one-on-one, non-barter exchange transaction is a plumber doing repair work for a dentist in exchange for dental services. The fair market value of the goods and services exchanged must be reported as income by both parties.

Here are a few things you should know about bartering:

• Barter Exchange A barter exchange functions primarily as the organizer of a marketplace where members buy and sell products and services among themselves. Whether this activity operates out of a physical office or is internet based, a barter exchange is generally required to issue Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, annually to their clients or members and to the IRS.

• Barter Income Barter dollars or trade dollars are identical to real dollars for tax reporting. If you conduct any direct barter – barter for another’s products or services – you will have to report the fair market value of the products or services you received on your tax return.

• Taxes Income from bartering is taxable in the year it is performed. You may be subject to liabilities for income tax, self-employment tax, employment tax, or excise tax. Your barter activities may result in ordinary business income, capital gains or capital losses, or you may have a nondeductible personal loss.

• Reporting The rules for reporting barter transactions may vary depending on which form of bartering takes place. Generally, you report this type of business income on Form 1040, Schedule C Profit or Loss from Business, or other business returns such as Form 1065 for Partnerships, Form 1120 for Corporations, or Form 1120-S for Small Business Corporations.

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