Bartering

[taxea]

I was curious with my hairdresser because for me, I'm providing biz services but receiving personal services in exchange. He is providing biz services and recieving partial biz & partial personal (tax prep w/sch C).

But neither of us has a lot of cash and we both have services the other wants.

first you have to determine the normal billing amount for each of you. If one is more than the other the barter portion is the like amount. Each of you has to report the income and take the expenses on your respective returns. You cannot take the expenses of the service the hairdresser is providing to you but you can take the expense of preparing the return. The hairdresser can take all the expenses because the return cost and the services to you are all a part of her/his business.

[JohnH]

first you have to determine the normal billing amount for each of you. If one is more than the other the barter portion is the like amount. Each of you has to report the income and take the expenses on your respective returns. You cannot take the expenses of the service the hairdresser is providing to you but you can take the expense of preparing the return. The hairdresser can take all the expenses because the return cost and the services to you are all a part of her/his business.

Why aren't the services of the hairdresser deductible? Joan has to look good when she meets business clients to prepare their taxes! Any Avon or Mary Kay rep can set you straight on that bit of tax advice...

[taxea]

Why aren't the services of the hairdresser deductible? Joan has to look good when she meets business clients to prepare their taxes! Any Avon or Mary Kay rep can set you straight on that bit of tax advice...

Because she doesn't take her hair off and leave it at the office. To me this is the same as clothing that is suitable for public wear. Mary Kay and Avon reps are not tax qualified to give this type of advice.

[powerage]

general thoughts

Potential client about 4 years ago, a big and imposing dude. Asked about writing off his suites, I said no and explained why, he set an appointment, and never showed. Yes, he was given wrong advice.

I have talked to a few direct sales reps who do know the tax law, and interpret it correctly. If I remember correctly, a lady named June Walker runs a tax blog aimed at IC's/direct sales.

My steel toes are falling apart, and the shoes I was given make me whole again.

IMHO, bartering with values under $100 should not even be a tax issue.

[joanmcq]

Why aren't the services of the hairdresser deductible? Joan has to look good when she meets business clients to prepare their taxes! Any Avon or Mary Kay rep can set you straight on that bit of tax advice...

*snort, guffaw, guffaw*

But actually it's easy: I've billed him and I see him every 8 weeks and pay for cut & color (and have been for the last 20 years or so). I'll just keep a tab until we're even.

[tpert]

This is not a barter this is a marketing expense, if you have any expenses related to your speaking engagements.

So, you are saying that I have a marketing expense of $0 rather than a meal in exchange for my services?