Barter for Electrical Work?

[Little Bill]

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!!!

Well I have a story about bartering with a dentist. It's not an electrical related barter, but barter just the same.

Years ago I was helping my Dad on a project for a dentist. We were building a couple of rooms in the dentist's basement for emergency after hours dental work.

When finished, the dentist ask me if I would trade my part of the work for dental work. I was having a problem at the time and I can't remember if I told him about it or not, or if it was just coincidence.
But I decided to take him up on it.

They don't do it now days, but dentists use to rub a numbing solution on your gums, then wait a few minutes, then give you the numbing shot, then wait for the area to get numb.

This dentist rubbed the solution on, then immediately gave me the shot, then immediately started to work on my tooth....nothing was numb!:rant:

I was trying to object and stop him but he was a big man and he put his knee on my lap and his forearm across my chest and kept working.:happysad:
He was a dentist in the military and I think he learned his techniques from there!

Long story short, I would gladly have paid another dentist to do the work and got paid from the torturer..I mean dentist.

My dad was smarter than me, he took cash!:lol:

 

[infinity]

For those who didn't understand my original post I'll clarify, what I meant was that a barter transaction that no one (the government) knows about eliminates the need to pay taxes, it doesn't eliminate the requirement to pay taxes. I was commenting to the OP who said this, "Any advice or things I need to consider prior to making some agreement would be extremely helpful" so for him or those who want to avoid paying taxes because it's a silent transaction it can be a good deal. Over the years I have been approached about bartering arrangements and I've declined because I'm against any bartering for electrical work.

 

[iwire]

It seems to me that the only reason someone wants to barter is because they feel that they will get a better deal by bartering vs normal payments.

With one person already approaching this deal as a way to save money it seems very likely they will be dissatisfied with the final costs.

I have some basic rules I (try to) follow, don't mix family and friends with business / money, do not barter, treat others as you expect to be treated.

 

[kwired]

For those who didn't understand my original post I'll clarify, what I meant was that a barter transaction that no one (the government) knows about eliminates the need to pay taxes, it doesn't eliminate the requirement to pay taxes. I was commenting to the OP who said this, "Any advice or things I need to consider prior to making some agreement would be extremely helpful" so for him or those who want to avoid paying taxes because it's a silent transaction it can be a good deal. Over the years I have been approached about bartering arrangements and I've declined because I'm against any bartering for electrical work.

If you make a straight trade (no extra cash involved) each party has figured they gave up same monetary value as they received - there is no net income or loss to tax.

Sales tax is a little different, and really does depend on laws where the transaction takes place. A lot of places sales tax laws may see this as two separate sales and wants to see tax applied as applicable. But in the case of dental care - there is probably not much sales that sales tax applies to in most places, but this is not always true with the kinds of sales an electrical contractor may make.

 

[jim dungar]

If you make a straight trade (no extra cash involved) each party has figured they gave up same monetary value as they received - there is no net income or loss to tax.

This is not true.

Unless the exchange was for 100% 'expensable " (e.g. directly reduces gross income) work you will have a net benefit. In the examples used so far, dental expenses would be unlikely to directly offset an electrician's income on federal income tax forms.

However an informal tit-for-tat type 'service swap' is unlikely to be an actual barter. For example, my buddy makes and accepts 'semi-truck' deliveries for me, and I help replace VFDs on his 8 machining centers. At least according to our accountants, that is.

 

[rt66electric]

What About working for the Church

What About working for the Church

Just to enhance the discussion...

When I do a small job for the Church..

Should I charge the Church. Minus 10% discount????

Should I tell the IRS and pay 30% to the eagle for the amount of work done??

Should I tell the IRS and get a Deduction for professional services??

Should I take a check , then write a check back to the Church??

I am not worried about the LORD, but I do not want to work for the eagle for any more than I have too.

 

[GoldDigger]

Just to enhance the discussion...

When I do a small job for the Church..

Should I charge the Church. Minus 10% discount????

Should I tell the IRS and pay 30% to the eagle for the amount of work done??

Should I tell the IRS and get a Deduction for professional services??

Should I take a check , then write a check back to the Church??

I am not worried about the LORD, but I do not want to work for the eagle for any more than I have too.

The guideline is actually pretty simple:
Any labor that you do not get paid for is a contribution from the church's point of view, but you cannot deduct it from your taxes because you do not also report the income that you donated back. Whether that labor is a type that you do professionally, or just lending a hand, the situation is the same.
If you buy parts and deliver them to the church at cost, you have no charitable deduction and no profit, so it is the same as charging the markup as income to your business and then donating the same amount of cash to the church. Except for most people it is a lot easier not to claim or report when the number match up. And it means that nothing gets rendered unto Caesar by you or the church.
Disclaimer: I am not a tax attorney, consult a professional tax consultant, YMMV.

 

[kwired]

This is not true.

Unless the exchange was for 100% 'expensable " (e.g. directly reduces gross income) work you will have a net benefit. In the examples used so far, dental expenses would be unlikely to directly offset an electrician's income on federal income tax forms.

However an informal tit-for-tat type 'service swap' is unlikely to be an actual barter. For example, my buddy makes and accepts 'semi-truck' deliveries for me, and I help replace VFDs on his 8 machining centers. At least according to our accountants, that is.

If I do some work for someone and invoice them for $1000.00 (invoice that includes taxes and other fees), and instead of cash they pay me with dental work and invoice that work as being worth $1000.00 (again invoice includes taxes or other fees) are we not effectively even? Keeping track of accounting is simpler and more customary if each party simply writes the other party the check for $1000.00, but there are ways to settle things by considering the trading of goods and services instead of trading cash.

Just to enhance the discussion...

When I do a small job for the Church..

Should I charge the Church. Minus 10% discount????

Should I tell the IRS and pay 30% to the eagle for the amount of work done??

Should I tell the IRS and get a Deduction for professional services??

Should I take a check , then write a check back to the Church??

I am not worried about the LORD, but I do not want to work for the eagle for any more than I have too.

The guideline is actually pretty simple:
Any labor that you do not get paid for is a contribution from the church's point of view, but you cannot deduct it from your taxes because you do not also report the income that you donated back. Whether that labor is a type that you do professionally, or just lending a hand, the situation is the same.
If you buy parts and deliver them to the church at cost, you have no charitable deduction and no profit, so it is the same as charging the markup as income to your business and then donating the same amount of cash to the church. Except for most people it is a lot easier not to claim or report when the number match up. And it means that nothing gets rendered unto Caesar by you or the church.
Disclaimer: I am not a tax attorney, consult a professional tax consultant, YMMV.

I am not a tax professional either, but I think the best way to donate these type of services and take a deduction is to bill them and then turn around and make a donation. Depending on rules of your sales tax jurisdiction the church is likely exempt from paying sales tax, but you are not if you donate goods. If you sell them goods with no tax (because they are exempt) then later make a donation they got the sales tax break and you paid for their expense with your donation. If you marked items up you did profit, but you then gave that profit back with your donation.

 

[jim dungar]

If I do some work for someone and invoice them for $1000.00 (invoice that includes taxes and other fees), and instead of cash they pay me with dental work and invoice that work as being worth $1000.00 (again invoice includes taxes or other fees) are we not effectively even? Keeping track of accounting is simpler and more customary if each party simply writes the other party the check for $1000.00, but there are ways to settle things by considering the trading of goods and services instead of trading cash.

When filling out your IRS form 1040, or your payroll taxes and social security paper work, or even your 'loan applications', do you presently reduce your gross income by 100% of your dental expenses? If not, why not?

The exchange of currency is not the only thing we are taxed on.

 

[George Stolz]

It seems to me that the only reason someone wants to barter is because they feel that they will get a better deal by bartering vs normal payments.

With one person already approaching this deal as a way to save money it seems very likely they will be dissatisfied with the final costs.

I have some basic rules I (try to) follow, don't mix family and friends with business / money, do not barter, treat others as you expect to be treated.

Hear hear. Another complication is when the exchange does not take place all at the same time. "Do mine, and I'll do yours after it all works out."

 

[kwired]

When filling out your IRS form 1040, or your payroll taxes and social security paper work, or even your 'loan applications', do you presently reduce your gross income by 100% of your dental expenses? If not, why not?

The exchange of currency is not the only thing we are taxed on.

Actually, yes. I have to run medical and dental expenses through a benefit plan that my business reimburses me for. Even though I am a sole proprietor it all comes from the same pot, but the proper paperwork needs to be there in case of audit.

I'm not quite certain what you mean with 'loan applications'. Proceeds from a loan are not taxable income, though interest and other fees paid are expenses - if the loan is for business purposes. Repayment of principle portion of a loan is not an expense.

 

[jim dungar]

I'm not quite certain what you mean with 'loan applications'.

I was asking if you reduce your stated gross income amount by 100% of your dental expenses when you apply for a loan.

 

[cowboyjwc]

I did it for a while with my chiropractor and he was really good about it, we never really kept track and he paid for the material, so it was all good.

But other than that, it's never really worked out for me. I tell people that if I could get back all of the favors that were owed me from contractors, I could build a house.:happysad:

 

[mtfallsmikey]

I did it for a while with my chiropractor and he was really good about it, we never really kept track and he paid for the material, so it was all good.

But other than that, it's never really worked out for me. I tell people that if I could get back all of the favors that were owed me from contractors, I could build a house.:happysad:

That's exactly what Dad did. All of them (him and his contr. buddies) were starting families, and building houses in the early 50's, he did plumbing/heating on their houses, they did electrical/brick/carpentry work on his. They all worked for the same small group of buildiers back then, when they were REAL builders, but that's another thread

 

[kwired]

I was asking if you reduce your stated gross income amount by 100% of your dental expenses when you apply for a loan.

You may hold back on other reductions also, but they often want to see a copy of your income taxes also.

 

[tshea]

Bartering

Bartering

I once replaced an outlet in trade for a coffee table!
Both of us were happy.
That was a very long time ago.:lol:

 

[grasfulls]

long time ago

long time ago

I once replaced an outlet in trade for a coffee table!
Both of us were happy.
That was a very long time ago.:lol:

Long time ago that you were happy or did the work????