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Old 12-03-2013, 08:32 PM
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Barter and taxes

2013 was a bad year for us and our only income was through bartering and selling locally. We made enough income to cover our bills and keep a roof over our head so we assume its safer to file taxes rather than wait for the IRS to come knocking at our door. Is there a way to file without have a W2/1099? Do we need to file for a business license and ID number in order to file? Any help would be appreciated!!



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Old 12-03-2013, 11:09 PM
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Originally Posted by RavenzTown View Post


#1;2013 was a bad year for us and our only income was through bartering and selling locally. We made enough income to cover our bills and keep a roof over our head so we assume its safer to file taxes rather than wait for the IRS to come knocking at our door. Is there a way to file without have a W2/1099?



#2;Do we need to file for a business license and ID number in order to file? Any help would be appreciated!!
#1;Many people are not aware that the benefits derived from barter transactions are taxable and must be reported to the IRS on IRS Form 1099-B and your state tax return. The IRS and your state maintain websites where you can download income tax forms to report barter income. Generally, whatever property or services that you barter for amount to taxable income based on the FMVof the property or services received by the taxpayer.you need to submit your tax returnsby attaching a copy of Form 1099-B to your other tax forms. You need to keep a copy of all forms that were mailed, including IRS Form 1099-B.On line 7, you need to show the cash you received, the fair market value of any property or services you received, and the fair market value of any trade credits or scrip credited to your account by a barter exchange.






#2;Many people choose to operate small home businesses without getting a business license, because technically it is possible to do so in some cases without penalty. But if the business falls under special state requirements and regulations or you need to bring the small company public with common business services, like banking, you are going to have to apply for a license. When you go into a bank to open a business checking or savings account, you will be asked for identification and a business license or permit from the state. The bank usually needs to verify that you are in fact a legitimate business before opening an account in a company name. the IRS doesn't care if you have a business license or not. Business licenses are required by local governments - not the IRS.Once you are required to have a biz license , then you ned to use it to file state retrun.You still can file your return with your SSN# in lieu of an EIN.
If you operate your business as a corporation or partnership, you have employees, withhold taxes on income, or have a Keogh plan, you will have to apply for an EIN with the IRS. You should do this after you have decided the form of ownership and your business name. The EIN is like a social security number for your business. There is no fee for applying for an EIN and you can do it online with the IRS.



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