Small Business Bartering
If you own a small business, it's likely that at some point someone will offer you a barter, or it will occur to you that you might want to make an offer to barter. This is a normal business practice that can benefit both parties to the barter. When your cash is tied up elsewhere, it can let you move forward on a project that might otherwise have to take a back burner.
There are some things to consider when you choose to barter. Specifically, the IRS considers anything you receive through the bartering arrangement to be income and requires it to be reported as such on your annual tax return. They also require that the value of the goods or services be set by fair market value. You may barter with a friend who owns a business, a member of a leads group or networking group that you attend, or you may participate in a Barter Exchange through a website, phone app or even a physical location. A barter exchange will provide you with a 1099-B each year. You can read more about bartering in small business here: Accountability Team Trust the experience and training of your CPA, a real tax professional, to help ensure that your barter income is correctly reported to keep you out of trouble with the IRS. There may be some specific circumstances in which you may incur additional income, (self-) employment, or excise taxes on your bartered income. Let your tax professional guide you through these details.
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