Money Saver: Bartering & Taxes

DENVER (CBS4) - CBS4 recently aired a story on bartering; people who trade services in order to save money. Perhaps a car mechanic will do repair work in exchange for dental work from a dentist. Despite the fact that there is no money exchanged, the IRS considers it taxable income.

There are two IRS websites below to help you determine if you need to pay taxes on work you've traded. CBS4 money saver Suzanne McCarroll talked with Denver certified public accountant Bill Frasier.

"Absolutely every dollar you barter you must pay taxes on," Frasier said.

McCarroll posed the question, when does an exchange of service qualify as bartering or when is it neighbors and friends helping one another?

"That's a very difficult question," Fraser said.

He goes on to warn people, "The IRS is really looking into this area."

LINK: Basics Of Bartering

LINK: Different Types of Barter Exchanges

If you have a money saving tip that you would like Suzanne to check out, call the Money Saver tipline at (303) 863-TIPS (8477) or email her at moneysaver@cbsdenver.com. Also visit the Money Saver section for more stories about saving money for you and your family.