More details to this question:
I own a dance studio. I would like to offer a program for 14 yr olds and up that would train them to be a good assistant in the classroom. They would only be working no more than 2 hours per week. I would like to pay them by bartering with their parents. I'd take off a certain amount each month from the parent's tuition bill. Is this legal. Would it be legal to not pay them at all and to be able to consider it "service hours' toward rewards at our school or in their primary schools.
1 ANSWER
Anthony Van Zwaren
I know that the IRS does not accept bartering as something in lieu of taxes. If you barter something that might have a value of $200.00 (for example) then you report that as $200.00. The same would be the case for the person who was on the other end of the deal (in a way this may result in double taxation unlike paying cash). I am linking you to what the IRS has to say about bartering. Also, there have been cases, at least in New Jersey, where companies that took on interns to do work that might have been paid to hired employees have been penalized for not providing pay to the intern. This has affected even law firms and others like radio and tv studios that use interns from college. So you better discuss this with an attorney. While what you are talking about something very small scale, there are potential pitfalls.
Answered on Jul 22nd, 2016 at 12:59 PM