Uncle Sam’s Role in Barter

Last year some members of the media ran a story on Southern Barter Company, and they followed an Atlanta couple as they demonstrated how people could spend an entire day using only barter. The couple went shopping at a Buford-based gift shop, visited a Suwanee-based dentist, ate dinner at a Dacula restaurant, picked up their children from a Montessori school in Grayson, and traveled in a limousine from place to place. One reporter was fascinated with the concept of barter but worried about the possible adverse tax implications. “Wouldn’t the tax you have to pay make it not worth it?” she asked some SBC members.

What the reporter got right was that barter members do receive a 1099 form at the end of the year–just like any other miscellaneous income–but what she didn’t fully get was that you get to write off any business or medical expenses you pay on barter–just like you can with “regular” income.

For example, even though one of SBC's members reported earnings of over $10,000 in the trade club last year, he was able to write off $9,000–the business and medical portions of what he spent on trade, and therefore his net trade income–and actual tax paid–was practically non-existent.

Bottom line? Barter income is taxable, but many barter expenses are tax-deductible. If you have any tax questions, ask your tax professional. Or better yet, join SBC and get a barter accountant to fill you in on all the legalities. It’s simpler than you might think–and a proven worthwhile investment for thousands.

Atlanta Couple Takes the Barter Plunge

In recent years Atlanta-based videographer Eric Rice began looking for ways to expand his production company, despite the economic downturn. Fortunately, right around that time his pest control service provider, told him about the fascinating concept of barter. “You do a job. You just provide your product or service, and you receive ‘trade dollars’ that go into a sort of virtual bank account. You can then spend those ‘dollars’ on tons of items and services you or your business need. It’s not one-on-one trading, but you spend your trade dollars with any business in the network. And the trade fees are just pennies on the dollar!”
Well, Eric and his wife, Lisa, were sold, so they joined a barter club and began producing videos for a range of members like eye care facilities, dentists, and dry cleaners. And they began spending their trade dollars on travel, restaurants, orthodontists, dentists, and even video duplication services for Eric’s business. They bought some necessity items and some luxury items they would never have justified spending cash on in a volatile economy. Last year the Rice’s and their company, 44 Films.tv, did over $25,000 in barter business–and spent almost as much on products and services they wanted. “Whenever we need something,” says Lisa, “We call Laurie or check out Southern Barter’s website to see if we can find that item or service on barter. We’ve been surprised and delighted to find veterinarian services, printing for graduation invitations… and even family entertainment and sports tickets.”
So, is it really this easy to barter? It really is! Certainly cash is still “king,” but there’s nothing like feeling of freedom when you allow yourself to spend a little extra in the virtual world of barter. For more information on what the Rice’s did, and how you can benefit from barter, please call 1-877-779-8803