Barter for Electrical Work?

[mrtom]

I had an interesting situation today. A local dentist contacted me by way of a referral, and was interested with me bidding the electrical work for a new dental office. He was interested in bartering dental work either as a "labor only" trade or for a deduction in the total electrical costs. I do need some dental work as it has been awhile since seeing a dentist, so I am interested in bidding the job plus getting some dental work done sounds good to me!

I will be meeting him next week to go over plans, existing electrical condition at new location, and for him to give me a free dental exam/xrays at existing dental office in exchange for my estimate, time, and input/advice.

I have traded labor with other tradesmen over the years and had no problems. I was wondering if anybody out there works with the barter system, would be able to give me some advice or let me know of success or horror stories bartering with someone (other than another tradesman for small jobs or repairs).

Any advice or things I need to consider prior to making some agreement would be extremely helpful.

Thank you!!!

 

[satcom]

Electrical Contracting is a business and like any other business you have overhead, and operating expenses, every time you move your truck it costs money and even your non productive time is costing you money, your not a farmer, trading some string beans for a quart of milk,

He most likely will think his time, is worth more, then yours, sounds like you better be ready to take a loss, he may have no idea an average electrical contractor has to charge $200 to $300 an hour to just break even I bet he thinks $10 to 15 dollars hr is what you are worth.

 

[Ponchik]

I dont like bartering because almost always the other party thinks that i have screwed him.

I think the best way is to get some pricing from the dentist and you give him your price then decide if you want to barter or not. As mentioned earlier he will probably think that his time is more valuable than yours. and furthermore that he will get a complete rewire in exchange for a two fillings and a cleaning.


I have had lawyer and doctor clients that after receiving my bill complain that i make more than they are. and I always reply "who said you are to make more money than I should"

 

[mrtom]

Thank you for the replies.

I was going to approach the guy with an estimate for the project at my normal rate as if I expect a check in full without any bartering or discounts of any kind and for him to give me an estimate after dental consultation in the same way AND then we can sit down and discuss bartering labor. I think he is looking at this deal for a deduction off his bill. I never did this before for outside of trading hours with other tradesmen, so I am kinda wondering if this dental office is something I should do with bartering hours. Thanks for your input, Enjoy the weekend.

 

[Strummed]

As someone said, one person is always going to think their time is worth more than the other person's. Even if it really is, they may think it's worth way more than the other person agrees with.

Just price it normally, break it down to dollars and cents and whoever has a lower total at the end pays the other guy the difference.

 

[Fulthrotl]

Thank you for the replies.

I was going to approach the guy with an estimate for the project at my normal rate as if I expect a check in full without any bartering or discounts of any kind and for him to give me an estimate after dental consultation in the same way AND then we can sit down and discuss bartering labor. I think he is looking at this deal for a deduction off his bill. I never did this before for outside of trading hours with other tradesmen, so I am kinda wondering if this dental office is something I should do with bartering hours. Thanks for your input, Enjoy the weekend.

well, in truth, the whole world is a barter system.

we just invented money to keep score, and 'cause
it's damned annoying to keep $500 worth of chickens
in your wallet. the feathers get matted.

the most common reason for trading is that if you
do $15,000 worth of work, and he does $10,000
worth of work, he gives you a check for the difference,
and your tax return shows $5,000 in receipts,
and the tax on that $10k is between your conscience
and the IRS.

i've had customers prepay, or load the front end
if they want to get the money off their books by
year end. it's usually one of those dec. 20th decisions.

my pricing on the job will reflect that i'm having to
pay the tax on the money instead of them. you want
me to accept the money, and pay tax on the full
amount, without any expenses to offset it?

not a problem. i add 25% to my quote.

 

[grasfulls]

barter tax

barter tax

Any advice or things I need to consider prior to making some agreement would be extremely helpful.

Thank you!!!

Technically (yes, it may never be enforced),isn't bartering supposed to be declared by both parties so that both will be taxed on the assessed value? My question then is, what if we only bartered and none of us ever had money?

 

[GoldDigger]

Technically (yes, it may never be enforced),isn't bartering supposed to be declared by both parties so that both will be taxed on the assessed value? My question then is, what if we only bartered and none of us ever had money?

Then we would have to barter with the IRS. Maybe they need some electrical work done too?

 

[infinity]

Bartering eliminates the need to pay taxes, be it sales taxes on services or income tax. I'm wondering if in many cases it's even legal. Likely you would still need to pay the tax on the value of the service.

 

[stevenje]

Bartering eliminates the need to pay taxes, be it sales taxes on services or income tax. I'm wondering if in many cases it's even legal. Likely you would still need to pay the tax on the value of the service.

What about the EC's liability insurance, bonding, workman's comp and such? I wonder what the carriers would cover if needed in a barter agreement. Food for thought.

 

[rt66electric]

professional courtesy

professional courtesy

I will trade with other tradesmen, mechanic, music teacher.

I will trade electrical parts for ANYTHING

i figure my time is worth about as much as yours.
Time for time, parts is parts.
On large or difficult to calculate jobs . a person can call it "store credit"

 

[jim dungar]

Bartering eliminates the need to pay taxes, be it sales taxes on services or income tax.

Wrong - bartering does not negate taxes.

From the IRS
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Bartering-Income

"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."

 

[infinity]

Wrong - bartering does not negate taxes.

From the IRS
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Bartering-Income

"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."

You didn't read my entire post.

I'm wondering if in many cases it's even legal. Likely you would still need to pay the tax on the value of the service.

 

[GoldDigger]

You didn't read my entire post.

Perhaps a better statement would have been that bartering removes the need to withhold taxes?

 

[grasfulls]

bartering taxed

bartering taxed

Bartering eliminates the need to pay taxes, be it sales taxes on services or income tax. I'm wondering if in many cases it's even legal. Likely you would still need to pay the tax on the value of the service.

Direst form the IRS:
http://www.irs.gov/taxtopics/tc420.html

Barter exchanges are required to file Form 1099-B (PDF), Proceeds From Broker and Barter Exchange Transactions for all transactions unless they meet certain exceptions. Refer to Bartering in Publication 525, Taxable and Nontaxable Income, and the Form 1099-B Instructions for additional information on this subject. Persons who do not contract a barter exchange but who trade services are not required to file Form 1099-B. However, they may be required to file Form 1099-MISC (PDF). If you are in a business or trade, you may be able to deduct certain costs you incurred to perform the work that was bartered. If you exchanged property or services through a barter exchange, you should receive a Form 1099*B. The IRS also will receive the same information. END QUOTE

As rt66electric said, barter with the IRS...Maybe they will do the tax forms for us and we can wire common sense into their brain?

 

[GoldDigger]

Direst form the IRS:
... and we can wire common sense into their brain?

Electricians, not magicians.

 

[grasfulls]

not magicians

not magicians

Electricians, not magicians.

I thought for sure a little pulsed 4k at say...a constant current of 5A could really not do anything but help.

 

[kwired]

Bartering is still a trade between the two parties, just like exchanging cash for goods or services is. In the case of the dentist and the contractor - each party will still have expenses related to their services. If you purchased all the materials but did not sell them you have no income, but have no expense either, you have purchased inventory if you did not sell it.

If done properly it all works out in the end. Some don't put enough value into their labor, some don't put enough value in it. You are effectively doing same thing though if you give someone a "great deal". If you sell something for less than you typically sell it for, you are not taking a loss as much as you are taking less profit. Bartering goods or services can be same way. As long as any reported market values of what was traded is reasonable, there will likely be no questions asked.

Same dentist can do work for needy people for little or no charge and write off whatever usual profits were not earned. I have heard of occasional clinic events where a group of dental care providers do just that, they have a day or two where they help people that can't afford dental work. I don't know just what procedures they will or will not do, there is probably some agreed on limits, but they do at least take a look at your problem(s) and go from there. I think they require no payment, but do have free will donation boxes. They get the satisfaction of helping people in need, and can write off any losses. Nothing there stopping an electrician or any business for that mater from doing the same if they want to. It kind of goes against general business doctrine, but it is a good act for mankind, which we kind of have a lack of in today's society.

 

[Sierrasparky]

You didn't read my entire post.

WOW you spoke that one out of both sides of the mouth.

One side you say it eliminates taxes
Then you say , you don't think it's legal
Then you say you would have to pay tax on the value.

Well Income tax yes.
Sales tax in most states.

Do most baters pay the tax nope.

You kinda wonder about the TV show Barter Kings.
i bet they'll be a IRS target.

 

[kwired]

WOW you spoke that one out of both sides of the mouth.

One side you say it eliminates taxes
Then you say , you don't think it's legal
Then you say you would have to pay tax on the value.

Well Income tax yes.
Sales tax in most states.

Do most baters pay the tax nope.

You kinda wonder about the TV show Barter Kings.
i bet they'll be a IRS target.

It all comes down to if one guy wants to take an expense for something, he typically will need to provide evidence of who took income from it. If both parties are willing to call it even, then there is really no net income or expense for either. Sales taxes could be more complicated, and will depend on laws where the transaction took place.