Four Things You Should Know if You Barter

Small businesses sometimes barter to get products or services they need. Bartering is the trading of one product or service for another. Usually there is no exchange of cash. An example of bartering is a plumber doing repair work for a dentist in exchange for dental services.

The IRS reminds all taxpayers that the fair market value of property or services received through a barter is taxable income. Both parties must report as income the value of the goods and services received in the exchange.

Here are four facts about bartering:


1. Barter exchanges. A barter exchange is an organized marketplace where members barter products or services. Some exchanges operate out of an office and others over the internet. All barter exchanges are required to issue Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, annually. The exchange must give a copy of the form to its members and file a copy with the IRS.

2. Bartering income. Barter and trade dollars are the same as real dollars for tax reporting purposes. If you barter, you must report on your tax return the fair market value of the products or services you received.


3. Tax implications. Bartering is taxable in the year it occurs. The tax rules may vary based on the type of bartering that takes place. Barterers may owe income taxes, self-employment taxes, employment taxes or excise taxes on their bartering income.


4. Reporting rules. How you report bartering varies depending on which form of bartering takes place. Generally, if you are in a trade or business you report bartering income on Form 1040, Schedule C, Profit or Loss from Business. You may be able to deduct certain costs you incurred to perform the bartering.

Ten Facts about Capital Gains and Losses

 

The term “capital asset” for tax purposes applies to almost everything you own and use for personal or investment purposes. A capital gain or loss occurs when you sell a capital asset.

Here are 10 facts from the IRS on capital gains and losses:

1. Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. Capital assets include your home, household furnishings, and stocks and bonds that you hold as investments.

 

2. A capital gain or loss is the difference between your basis of an asset and the amount you receive when you sell it. Your basis is usually what you paid for the asset.

 

3. You must include all capital gains in your income.

 

4. You may deduct capital losses on the sale of investment property. You cannot deduct losses on the sale of personal-use property.

 

5. Capital gains and losses are long-term or short-term, depending on how long you hold on to the property. If you hold the property more than one year, your capital gain or loss is long-term. If you hold it one year or less, the gain or loss is short-term.

 

6. If your long-term gains exceed your long-term losses, the difference between the two is a net long-term capital gain. If your net long-term capital gain is more than your net short-term capital loss, you have a 'net capital gain.’

 

7. The tax rates that apply to net capital gains are generally lower than the tax rates that apply to other types of income. The maximum capital gains rate for most people in 2012 is 15 percent. For lower-income individuals, the rate may be 0 percent on some or all of their net capital gains. Rates of 25 or 28 percent can also apply to special types of net capital gains.

 

8. If your capital losses are greater than your capital gains, you can deduct the difference between the two on your tax return. The annual limit on this deduction is $3,000, or $1,500 if you are married filing separately.

 

9. If your total net capital loss is more than the limit you can deduct, you can carry over the losses you are not able to deduct to next year’s tax return. You will treat those losses as if they occurred that year.

 

10. Form 8949, Sales and Other Dispositions of Capital Assets, will help you calculate capital gains and losses. You will carry over the subtotals from this form to Schedule D, Capital Gains and Losses.

Take Credit for Your Retirement

 

Saving for your retirement can make you eligible for a tax credit worth up to $2,000. If you contribute to an employer-sponsored retirement plan, such as a 401(k) or to an IRA, you may be eligible for the Saver’s Credit.

Here are seven points the IRS would like you to know about the Saver’s Credit:

 

1. The Saver’s Credit is formally known as the Retirement Savings Contribution Credit. The credit can be worth up to $2,000 for married couples filing a joint return or $1,000 for single taxpayers.

 

2. Your filing status and the amount of your income affect whether you are eligible for the credit. You may be eligible for the credit on your 2012 tax return if your filing status and income are:

• Single, married filing separately or qualifying widow or widower, with income up to $28,750
• Head of Household with income up to $43,125
• Married Filing Jointly, with income up to $57,500

3. You must be at least 18 years of age to be eligible. You also cannot have been a full-time student in 2012 nor claimed as a dependent on someone else’s tax return.

 

4. You must contribute to a qualified retirement plan by the due date of your tax return in order to claim the credit. The due date for most people is April 15.

 

5. The Saver’s Credit reduces the tax you owe.

 

6. Use IRS Form 8880, Credit for Qualified Retirement Savings Contributions, to claim the credit. Be sure to attach the form to your federal tax return. If you use IRS e-file the software will do this for you.

 

7. Depending on your income, you may be eligible for other tax benefits if you contribute to a retirement plan. For example, you may be able to deduct all or part of your contributions to a traditional IRA.

Six Tips for Charitable Taxpayers

Contributing money and property are ways that you can support a charitable cause, but in order for your donation to be tax-deductible, certain conditions must be met. Read on for six things the IRS wants taxpayers to know about deductibility of donations.

1. Tax-exempt status. Contributions must be made to qualified charitable organizations to be deductible. Ask the charity about its tax-exempt status, or look for it on IRS.gov in the Exempt Organizations Select Check, an online search tool that allows users to select an exempt organization and check certain information about its federal tax status as well as information about tax forms an organization may file that are available for public review. This search tool can also be used to find which charities have had their exempt status automatically revoked.

2. Itemizing. Charitable contributions are deductible only if you itemize deductions using Form 1040, Schedule A.

3. Fair market value. Cash contributions and the fair market value of most property you donate to a qualified organization are usually deductible. Special rules apply to several types of donated property, including cars, boats, clothing and household items. If you receive something in return for your donation, such as merchandise, goods, services, admission to a charity banquet or sporting event only the amount exceeding the fair market value of the benefit received can be deducted.

4. Records to keep. You should keep good records of any donation you make, regardless of the amount. All cash contributions must be documented to be deductible – even donations of small amounts. A cancelled check, bank or credit card statement, payroll deduction record or a written statement from the charity that includes the charity’s name, contribution date and amount usually fulfill this record-keeping requirement.

5. Large donations. All contributions valued at $250 and above require additional documentation to be deductible. For these, you should receive a written statement from the charity acknowledging your donation. The statement should specify the amount of cash donated and/or provide a description and fair market value of the property donated. It should also say whether the charity provided any goods or services in exchange for your donation. If you donate non-cash items valued at $500 or more, you must also complete a Form 8283, Noncash Charitable Contributions, and attach the form to your return. If you claim a contribution of noncash property worth more than $5,000, you typically must obtain a property appraisal and attach it to your return along with Form 8283.

6. Timing. If you pledge to donate to a qualified charity, keep in mind that for most taxpayers contributions are only deductible in the tax year they are actually made. For example, if you pledged $500 in September but paid the charity just $200 by Dec. 31 of that same year, only $200 of the pledged amount may qualify as tax-deductible for that tax year. End-of-year donations by check or credit card usually qualify as tax-deductible for that tax year, even though you may not pay the credit card bill or have your bank account debited until after Dec. 31.

Your Blueprint for Personal and Business Success

• Who among us has not recently experienced great change in his or her life?
• Who isn’t affected on some level by the major changes occurring in our world today?

Chaos seems to be a theme with no sign of disappearing in the near future. It is so easy to internalize this confusion.

• What if there was a simple, effective tool to help us to navigate changes and maintain inner peace and confidence?
• What if this tool was sustainable, something that could be used again and again in the future?
• What if you had already created an approach in the past that had worked well for you that simply needs to be re-structured, updated, and applied to existing and future changes as well as challenging circumstances?

Join Connie as she provides the tools and support to help you successfully navigate transition and stress. She has developed a tool that she calls Your Blueprint For Personal and Professional Success. She has used this tool successfully in her own life for many years and it has helped her land on her feet successfully amid transition, challenge, and change. Connie will show you how to create your own Personal Blueprint so you can feel calm and confident through-out the day no matter what's going on around you.

Connie Livingston is a consultant, coach, facilitator, strategist, and speaker with a background in financial services and Community Economic Development. She has worked with individuals and groups for 20 years toward achieving their goals. She started her practice three years ago because she believes that as she helps clients improve their financial, personal, and economic lives, healthy, stable communities are created.

One of her specialties is helping people navigate successfully through transition. Change can be scary; she knows because she has been through so many transitions in her own life. She has started several businesses, left a career in order to raise children, re-entered the world of paid employment, and experienced a number of career changes. She did this using a positive, systematic approach and landed on her feet successfully through the changes as well as in the financial realm. She loves to show her clients how she did this.

July 27, 2012 at 8am - 9:30pm

Tegu Hall, Morrisville

Register:  www.lamoillecountybusinessnetwork.com

PR 101

Elements of a Local-Regional Public Relations Program: Learn how to do the 'blocking and tackling' of media relations. We will discuss the basics of how to get your message across to your audience in the media that matter to you.

Presented by: Fred Iannotti of Iannotti PR

Fred Iannotti is a public relations veteran who, after three years doing local government PR, served a dozen on the corporate side, and since then on the agency side or consulting. Fred focuses on business and national press, but has a broad range of experience pitching consumer and vertical trade media.

Clients have included leaders in high-tech (AGFA Corporation, Iomega, ClearOne Communications, Photronics, Inc., Springer-Miller Systems, Inc., TÜV Rheinland of North America, Inc., Chesapeake Decision Sciences), as well as travel (Sandals and Beaches, Hilton International, Grand Bay Hotels & Resorts, RIHGA Royal, Regal Hotels International, SRS WorldHotel, Wyndham Hotels and Resorts, The Savoy Group), food (Vermont Gold, Turkey Hill, Godiva Ice Cream, Tetley USA, Lenders Bagels, Greenfield Healthy Foods division of Pepperidge Farm, Celentano Bros.), real estate (Millennium Partners, The Related Companies, Trump International, MONY), insurance (Nationwide, Equitable Life), and business-to-business (Factory Mutual Engineering and Research, NADIA Executive Coaching).

He has worked on cause-related marketing that includes Liz Claiborne's "Women's Work" domestic violence awareness program; Coors' "Literacy Pays"; Discover Card's "Tribute Awards"; and the U.S. Postal Service's "Healthy Aging Campaign." Prior to 1992, Fred researched, wrote, and published a dozen corporate annual reports, and coordinated shareholder and customer communications, as well as community and media relations, speechwriting, speakers bureau, and facilities tours for Connecticut-based Aquarion, an NYSE-listed firm with diversified operations in public water supply, real estate development, forest products, biowaste energy cogeneration, analytical laboratory testing, and nonutility management services. Aquarion's Bridgeport Hydraulic Co. public water utility subsidiary was the largest private landowner in Connecticut, with 20,000 acres in the west of the state.

He was a member of the Board of Directors (2002-12) of the Fairfield County Public Relations Association in Connecticut and its recording secretary. He is former vice chair and program chair (2002-04) of Appalachian Mountain Club's Connecticut Chapter; and served on the Executive Committee (2002-05) as editor of its activities listing in the club magazine; newsletter publisher; and for three years maintained the first section of the Appalachian Trail in New England. He has also served as an intermittent advisor to and trails maintainer for Green Mountain Club (2003-06), which maintains Vermont's Long Trail. He currently maintains the trail to Moss Glen Falls in Stowe, Vt.

September 28, 2012 - 8am - 9:30am
Tegu Hall - Cost $10.00
RSVP: www.lamoillecountybusinessnetwork.com

Diana Sheltra
Lamoille County Business Network, LLC.

Why Every Business Needs A Policies and Procedures Manual

Why would a one-woman LLC take on the (oh, so boring!) project of creating a Policies and Procedures Manual? Join Robyn Young, Owner of Money Care, LLC, as she discusses why she is clarifying and recording her company's policies and procedures, and the lessons she is learning along the way. Learn why your business, regardless of its size, should have its own manual and get some ideas on how to begin.

Robyn Young owns Money Care, LLC, a daily money management service that relieves individuals and their families of the burden of bill paying and other day-to-day financial tasks. Prior to founding Money Care in 2005, Robyn was Campaign Director at the United Way of Chittenden County and worked in economic development in the Former Soviet Union.

When: June 29, 2012 at 8am

Where: Tegu Hall, Morrisville

RSVP: www.lamoillecountybusinessnetwork.com

Contact: Diana Sheltra