Swapping favors in a time bank
You can put your blood in the bank. You can put your money in the bank. And now there are banks for your spare time.
Suppose you could earn a “time dollar” for every hour you baby-sat for your neighbor, drove the car pool or fed someone’s pet while they were away. Odds are you’d have plenty of time dollars saved up. Now imagine you could spend those time dollars getting other people to do favors for you.
That’s a time bank.
A time bank is a real network of people who pay each other for favors in a currency based on time. The basic theory is that your hour is worth the same as anyone else’s hour regardless of the skill required; one hour of cleaning gutters is equal in value to one hour of neurosurgery. In practice, though, you’ll find few brain surgeons. You will find plenty of people willing to help out with everything from housework and gardening to driving an elderly person to a doctor’s appointment.
Here’s a 90-second news story we just did about one man and how he uses his hobby of Web design to participate in a time bank.
The Web site featured in that video, Zakle, seems to have strayed somewhat from the original theory of time banking. It runs on a system of “time points” and, according to the Web site, “one point is roughly equivalent to one U.S. dollar.” So, on a site like Zakle, you might see a request for help with a computer worth 10 points next to a request for help building a swimming pool worth 700. However, it still seems to be roughly based on the amount of time spent.
(There's also an active community of people who swap time for goods and vice versa. Check out this story we did a few months ago called "Don't shop -- swap!")
My first question about time banks was: How could this affect my taxes? After all, it certainly seems as if people are receiving payment and paying each other for services using an unregulated, untaxed currency.
Technically, anything of value you receive is considered by Uncle Sam as income and reportable as such. So, if you did some landscaping work for your neighbor in exhange for a used car, for example, you should report the value of the used car as income on your taxes and deduct any expenses you incurred in performing the work.
But from what I can tell after doing some research, the IRS considers the charitable nature of time banks, along with the informal, noncommercial way in which they operate, and apparently has decided that time dollars do not represent taxable income.
For instance, the Web site of Dane County Timebank Inc. says, “Time Dollars have been ruled tax-exempt by the IRS because an hour is always valued at one hour, there is no legal responsibility on anyone's part to redeem a Time Dollar, and the purpose of Time Dollars is charitable.”
If you’re looking for a time bank, check out the TimeBanks USA Member Directory to find a time bank near you. TimeBanks USA can also provide help starting your own time bank, should you be interested.
Related reading at Money Talks News:
Copyright © 2014 Microsoft. All rights reserved.
ABOUT SMART SPENDING
LATEST BLOG POSTS
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'