Join a barter exchange

Barter exchanges, either online or offline, let you earn "trade dollars" by offering your products or services to their members. You can then use those trade dollars to buy from other members. You may be charged a registration fee, a fee to list your offer, a commission from each sale or a combination.

I recommend: National Trade Association is one of the largest barter exchanges in the U.S. You can also search for a barter exchange on the International Reciprocal Trade Association Web site and The Gigafree Network.

Do-it-yourself

You don't have to join a fancy barter service to do some old-fashioned swapping — just approach a business that sells what you need and offer a trade.

I recommend: To barter online without joining an exchange, try Craigslist, an online bulletin board that targets cities across the U.S. Craigslist provides pages on which people offer products and services for barter; just click on your nearest city and follow the "barter" link under “for sale”.

Trade safely

As with any business, bartering has its share of scammers. Try to talk to the trader on the phone, ask for photos of the product, request references and don't be afraid to ask for a contract.

I recommend: Find out if the business you're trading with (or the barter exchange itself) has generated any consumer complaints by doing a search on the Better Business Bureau website. In addition, check to see if a business belongs to its local Chamber of Commerce, which may indicate a level of trustworthiness: Chamber of Commerce.com lets you search for local chapters by city and state.

Beware the tax man

Income you receive from bartering is treated exactly as any other business income by the IRS — which means you have to pay taxes on it. The value of the bartered goods or services is determined by their fair market value — so even if you barter a $5 product for $500 worth of legal services, you pay taxes on the actual value of what you received.

I recommend: IRS Topic 420: Bartering Income explains how bartered goods and services are taxed and which forms you must fill out at tax time. The IRS offers more description and examples in Publication 525: Taxable and Nontaxable Income.