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>don't use the work/income/tax/payment cycle to do it, try to use bartering Fyi, bartering is taxable in the USA.[1] Yes, lots of people barter without report
by jasode 9y ago
>don't use the work/income/tax/payment cycle to do it, try to use bartering
Fyi, bartering is taxable in the USA.[1]
Yes, lots of people barter without reporting "fair market value" of bartered services to the IRS and yes, there isn't a large scale manhunt or crackdown for the tax evaders.
So it's very possible that people think bartering is cheaper because of ignorance of IRS laws. It's still technically "tax evasion". (Similar to how driving across state lines to buy things for 0% sales tax is also technically tax evasion when you don't declare the purchases in your home state's tax forms.)
E.g. A homeowner's lawn service costs $3000 a year. The homeowner could barter his web developer skills to make a "lawn care website" in exchange for 1 year of lawn care. The homeowner is supposed to declare the $3000-fair-market-value as income. If the homeowner is in 30% tax bracket, he owes ~$900 extra taxes PLUS he still has to expend the extra hours writing HTML/javascript to fulfill his side of the trade.
Is bartering that much cheaper if it's not "under the table" and you add in the the extra work+time to satisfy your end of the deal? (Especially if that extra work could be expended on other projects that are worth more than $3000 -or- working on websites more interesting to the homeowner than a lawn care service.)
[1] https://www.irs.gov/publications/p525/ar02.html#en_US_2016_publink1000229343 https://www.irs.gov/publications/p525/ar02.html#en_US_2016_p...