The Tax Impact of Business Bartering

Sarah B

Bartering is simply the exchange of services or property, and it’s a taxable event. For example, if a computer consultant trades services with an advertising agency, each must report income equal to the fair market value of the services they received, typically the amount the service provider would normally charge. The rules are similar when property is part of the exchange. For example, if a construction company accepts unsold inventory as payment, it must report income equal to the inventory’s fair market value.


Some businesses participate in barter clubs that manage these exchanges using “credit units.” Members earn credits by providing goods or services and redeem them later. Generally, bartering is taxable in the year it occurs. However, when participating in a barter club, you might owe taxes when credits are added to your account, rather than when they’re used. Barter clubs must send participants IRS Form 1099-B (Proceeds from Broker and Barter Transactions) by January 31 of the following year.


Business bartering transactions may be beneficial as long as you’re aware of the federal and state tax consequences. Contact the office if you need assistance or would like more information.

August 2025 Newsletter

By Sarah Bolton • August 3, 2025
Our regularly updated newsletter provides timely articles to help you achieve your financial goals. Please come back and visit often. Feature Articles Clean Vehicle Credits Expire September 30 Should You Be Making Estimated Payments? The Quirky Math of Partnership Income Tax Tips Timing a Roth IRA Conversion There's No Advantage to Last-Minute Tax Return Filing Bonus Depreciation Gets a Reprieve Upcoming Tax Due Dates

Bonus Depreciation Gets a Reprieve

By Sarah Bolton • August 3, 2025
First-year bonus depreciation had been phasing down 20 percentage points annually since 2023 and was set to drop to 0% in 2027. Businesses have been eager to learn the fate of this popular depreciation-related tax break. The good news is that the One, Big, Beautiful Bill Act makes permanent 100% first-year bonus depreciation for the cost of qualified new and used assets acquired and placed in service after Jan.19, 2025. If you’d been holding off on investing in qualified assets such as office furniture, equipment and off-the-shelf computer software because 2025 bonus depreciation had been only 40%, you may want to move ahead now. Remember, assets must not just be acquired but also be placed in service by Dec. 31 for you to claim 100% bonus depreciation on your 2025 calendar year tax return. Contact the office to learn about these and other business-related tax provisions in the law.

There's No Advantage to Last-Minute Tax Return Filing

By Sarah Bolton • August 3, 2025
If you requested an extension to file your tax return after the April 15, 2025, due date, the extended deadline is Wednesday, Oct. 15. If you have the information you need, consider filing now. There’s no advantage to waiting, and last-minute filing may lead to stress and worry. If you’re concerned about paying any tax owed, the IRS offers short- and long-term payment plans, as well as installment agreements, to taxpayers who qualify. It’s important to act quickly if you owe because any amount that was due April 15 accrues interest until the balance is paid. So, as soon as possible, gather your 2024 tax year records and contact the office for a tax preparation appointment or to ask questions you may have.