Bartering may be cash-free, but it’s not tax-free. Businesses must report as income the fair market value of the products or services received. If there are business expenses associated with the transaction, those can be deducted. Any income arising from a bartering arrangement is generally taxable in the year you receive the bartered product or service. And income tax isn’t the only tax to consider. Barter activities may also trigger self-employment taxes, employment taxes or an excise tax. We can help you assess a bartering arrangement and manage the tax impact.
Having all the right information can help save your business lots of money. You aren’t a tax expert. You have too much else to worry about. Let ASCEND help you with your business tax strategies.