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[LadyShea]

`Banks' allow members to pay with time, not cash - Yahoo! News (http://news.yahoo.com/s/ap/us_banking_time)

I like this idea

[Qingdai]

Time and money, two things I'm short of.

[Ensign Steve]

There's a big push around here (well, there's billboards for it, anyway) for small businesses to barter services with each other instead of spending cash. I don't know if it's a libertarian thing or what, but I like it. :thumbup: I don't know how that works with taxes, but if I were a small business owner, I'd endeavor to find out.

[Dingfod]

That's all well and good if you have anything of value to barter with, gimpy people with half-a-brain need not apply.

Time dollars are not taxable, according to Time Banks USA.O'RLY? I bet the IRS has a different view of that. (http://www.irs.gov/businesses/small/article/0,,id=188095,00.html)

[LadyShea]

Business barter is considered income/expenses and usually you use a schedule C for it. The goal is an even trade and a 0 balance.

The time banks, since it's all about personal time, might use that to exempt participants. I would def look into it before assuming I would have no tax liability.

The requirement to report barter payments only applies to payments made in the course of a trade or business, Therefore, the attorney must report on Form 1099-MISC the value of the painting services because painting the law office is an activity that is related to the attorney's trade or business. But the painter need not send a Form 1099-MISC to the attorney reporting the value of painting the law offices, because the work is in exchange for divorce legal services that are personal expenses and separate from the painter's business

ETA:The important thing to remember, however, is that in order to prevent Time Dollars from being taxed as income, you can never make an equivalency between a Time Dollar and regular dollar. For more on how to exchange your Time Dollars for stuff, please see this document on pricing things in the Time Dollar world.

[Dingfod]

What does that mean, don't deduct expenses you paid Time Dollars for on your IRS filings?

[LadyShea]

Time is not money in the world of IRS

[Adam]

I have very mixed feelings about things like this. It's got elements of a co-op, which is cool, but it also has elements of a tax evasion scheme, which is not. I suppose it's currently small enough that the lost tax revenue isn't really hurting anything, but I would think that if it became a common thing the IRS would need to revise its rules regarding time as money. They are basically using time as a unit of currency, so despite their claim that they are not using money, they really are; it's just not US dollars.

[Dingfod]

If that time is a service that is worth X number of dollars, they do care. And I don't know what service doesn't have a monetary value.

Don't get me wrong, I'm all for barter, but I wouldn't bet on it being a good way to evade paying income taxes.

Edited to add: Especially when there is a record of it, such as the aforementioned bank.

[LadyShea]

Well, if it was just a group of people getting together and swapping time (like a co-op), nobody would even know nor care. So, is it the "banking" time that leads to the questionable tax issues?

Again, I personally would be very careful as I have experience with business barter and schedule C's, but I like the idea of doing it informally just a community coop thing.