January 24, 2017
by Bob Meyer, Editor of BarterNews
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Three Ways Using Barter Can Lower
Trade dollars are far more flexible than at first imagined.
You can use them to chisel away at the tax bill, and chip away
at your payroll. Here's a look at three ways you can use barter
to reduce the revenues of the tax collector.
Consider the business owner who,
knowing she would be selling the property in the future, wanted
to make improvements on her real estate investment.
did not intend to "roll over" the property on a tax-free
exchange, she would have a capital gains tax on any amount she
received above her basis. But with a creative use of the trade
dollars in her account, she was able to avoid any gain on the
sale. This was accomplished by increasing her property value
with trade dollars spent on improvements.
when she finally sold the property her tax bill was nearly
eliminated with the increased basis. Wisely, she used trade
dollars to lower the tax liability, while at the same time
making valuable improvements that increased the property’s
marketability and value.
Employee Costs Versus
Every business owner knows it is
less expensive to use independent contractors than it is to hire
employees. Because employees cost the business owner FICA,
worker's compensation premiums and other expenses, the cost of
employees frequently soars above an average cost of 25% of the
actual payroll amount.
Independent contractors, on the
other hand, cost only the amount of their contract fees, since
they are responsible for their own employee taxes.
independent contractor who belongs to a trade exchange, and who
accepts trade dollars for (some) services has created evidence
of being in business — much the same as if he or she has a
business license or rents his or her own office space.
Because the aforementioned are things that business owners do,
an independent contractor who does them has shown a strong
indication of being a business owner. As opposed to someone who
simply performs tasks for another, yet claims to be an
owners who have workers with no chance of being classified as
independent contractors can still convert trade dollars into tax
savings. By setting up a Cafeteria Plan, under Section 15 of the
Internal Revenue Code, one can convert trade dollars to cash in
several ways. A Cafeteria Plan is a tax-qualified employee
benefit that allows employers to reduce employee wages, in order
for the employees to pay their own benefits with "before tax"
The employees get benefits that they would
otherwise have to purchase with "after tax" dollars, while the
employer gets a reduced payroll and therefore reduced payroll
taxes. First, by arranging for the employees to have a Premium
Plan under Section 125, the owner withholds dollars from the
payroll that are then used to pay premiums for the health plans
which the employees select.
If the trade exchange has
an insurance broker who takes commissions on trade (which
usually amounts to one month’s premium per year), the owner is
able to pay that premium with trade dollars and conserve the
cash from the employees for the month in question.
Besides converting the trade premiums to cash, the owner has
also reduced payroll taxes! This "double whammy" effect is
further enhanced by the fact that employees are happier than
otherwise, since they are also saving taxes on the benefits they
are paying for under the plan.
Second, by setting up
programs with trade exchange members in the medical professions,
the owner can further reduce payroll taxes through the Cafeteria
Plan. And at the same time can convert the trade dollars spent
The trick is to withhold the amount for the
Cafeteria Plan from payroll that the employee expects to spend
each year on unreimbursed medical expenses — such as deductibles
or co-payments, or for dental expenses where there is no dental
plan. If the business owner then pays the costs of the dentists,
chiropractors or the medical doctors with trade dollars, the
firm has converted significant amounts of trade into cash.
As an example, some employers provide that the Cafeteria Plan
covers annual physicals for employees, then provides the on-site
physician for the exam. Since they then pay the doctor with
trade dollars, the withheld cash from payroll amounts to a very
efficient conversion of trade to cash.
As we've seen, a
truly efficient use of trade dollars cannot only replace cash
expenditures, but it can generate tax or worker’s compensation
premium savings as well.
BarterNews.com — World's Largest
Hundreds of valuable articles,
techniques, and strategies are found in the following various barter
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Categories are found on the horizontal bar at the top - 3rd
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Give Yourself A Break
If you're burning a lot of energy
and concentration on a task, you should take more breaks not
fewer. Because even a few minutes away from the task will
increase your overall productivity by easing tension —
keeping you upbeat, and refocusing your mind.
If you find that hard to accept, consider this: You can
work for two hours at an unfocused 75% to 80%, but a
15-minute break will allow you to work for an hour and 45
minutes at 100%.
Is Your Trade Exchange Missing Out On
Valuable New Business?
your barter company's listing on BarterNews.com isn't current, you
are definitely missing out on new business. The web site
BarterNews.com receives heavy traffic - with over 150,000 page-views
every month. Entrepreneurs and corporate executives check the
thousands of articles, the weekly "Tuesday
Report," and the "Contacts
Section" of our site. They use the latter to find barter
companies with which to do business.
Is your barter company's listing up-to-date?
To keep your listing current is very easy. See the links below to (A)
update any changes to your company's listing, such as new location,
phone number, web site or other information, and (B) if your company
has not been listed.
Here's how to get on board:
make changes to your listing
How To Get More Sales In
Our street-smart restaurant
marketing report shows proven ways to rapidly boost your
restaurant's sales & profits.
The Growth and Use of Secondary
Capital (New Money) Creates Unprecedented Wealth In Today's New Age
There are many forms of secondary
capital — which can be defined as any financial instrument that
measures and communicates value in a common language. Would you like
to see and learn more about the many forms of secondary capital?
We have 70 free, informative and
inspiring, articles for you in our "Secondary Capital Section."
Check it out...
Get New Money-Making Ideas And
obtain useful, informative ideas and contacts in every available
back-issue of BarterNews.
barter company in the world is listed on our web site,
click through to our Global List
of Barter Companies.
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comments, questions, and observations.
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