Are Time Dollars Taxable?

Great question. The short answer to this is no. The IRS has issued a ruling on Time Dollars (TD$) that says they are not taxable.

But.

(You know there is almost always a "but" in these instances, right?)

But. Time Dollars (TD$) could be taxed, if the IRS saw that there was an equivalency being made between TD$ and US dollars (USD). For example, if my offer said, I will babysit your child for 1TD$ per hour or .5TD$ and $2 per hour, that would be equating Time Dollars with US Dollars. If an equivalency is established, the transaction is considered taxable by the IRS.

In a timebank, the currency is ALWAYS time. One hour is equal to 1TD$. Simple. Of course, you may also charge people for costs you incur in fulfilling a request, but you may NOT charge them anything but TD$ for your time.

For example: Time Trader Susan asks Time Trader John to bake a dessert. John can ask for money (USD) for ingredients. Susan can reimburse him, they can shop together and Susan can pay for the ingredients, or Susan can buy the ingredients using a list John provides her and John can use them to make the dessert. The method in which John is remunerated for the cost of the ingredients is not important as long as both Time Traders agree with it. Susan then pays John TD$ for the time it took him to prepare the ingredients. If the parties agree to it, she may even pay him TD$ for the time he took to shop for the ingredients, but the only USD that are exchanged are for the ingredients.

One more example: Time Trader Elizabeth needs a faucet installed. Time Trader Sam says he can help. Again, the person requesting the service is responsible for the costs associated with equipment and materials for the service, so Elizabeth purchases the faucet and materials needed, and Sam does the installation. Sam then is paid TD$ for the time it took him to do the job.

The same goes for scrapbooks, jewelry making, or any other service: if materials or ingredients are needed, the person receiving the service is responsible for those costs, but the way those costs are handled, as long as both participants in the transaction agree, is immaterial in the eyes of the timebank or the Coordinator.

Again, our currency is time.Our economy, like any economy, is healthiest when the currency moves freely between people. So get out there and make some exchanges. Do something for someone else. Find a service and try it out, just for fun.

But make sure you are only dealing in TD$. Don't establish an equivalency with US currency, because then your transaction, like a bartering transaction, could be considered taxable by the IRS.