Well, tax season is officially over. I came, I claimed and I said “boooouuurns”
Last year, my old company dutifully took off enough tax, CPP and EI for someone making a full annual salary. Since I ended my job early, I didn’t earn my entire income and therefore had “overpaid” my taxes. This is a good thing.
Additionally, I had made an RRSP contribution and fairly substantial charitable donations. If I could have left it at this, a lovely, large beautiful tax return would have been coming my way this spring.
CHA-CHING!!! I could have finally paid down my credit card and lived off more than $35/week for 4 months!!!!
However, I’m not so lucky.
Yes. It’s true. Bartering can have tax consequences. (Gasp!!) Any Barter Babe who has signed my Letter of Engagement and completed our transaction will know this.
The big question: When is a barter transaction taxable and when is it not?
It’s not too complicated, but there are a few things to think consider when bartering. Sadly, the Tax Man will not allow us to barter as a method of evading taxes… damn
For example, there’s a plumber and a personal trainer (this feels like the start of a joke that needs to add a priest or Michael Jackson to the mix). They want to swap services. The plumber will fix the personal trainer’s toilet in exchange for two singing lessons (she sings as a hobby). The plumber would usually charge someone $50 + HST to fix a toilet. The personal trainer doesn’t actually give singing lessons to people for money.
The swap is completed.
Plumber: Must claim $50 and remit the corresponding HST for the transaction.
Personal Trainer: Non-taxable barter transaction.
Essentially, a barter transaction is taxable if the good/service you provide is of the kind generally provided by you in the course of earning income from a business or a profession carried on by you. (Click here for more info)
So, unfortunately, because I intend to provide financial advice to earn an income one day, I am bartering a service that I need to claim. Sad but true!!
Alas, my lovely, large beautiful tax return was reduced to almost nothing. *silent tear*
However, I regret nothing!
Bartering has been utterly rewarding in every sense of the word. From receiving really great things and also to be able to use my skills to gain access to things I wouldn’t have had access to!
I am meeting truly fabulous people all around the city, and trying new things every day.
Bartering allows us all to use our skills. It’s a creative way to get what you want, even if you don’t have the cash in hand to pay.
I love bartering. It proves that there’s more to a person than how much money they make.
We are all worth more than the numbers in our bank accounts.