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3 ways small biz can write off disability accommodations

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in Small Business Tax

If you operate a small business, you may make special accommodations for disabled individuals. In some cases, you’re required to do so by law. For example, you might install ramps for easier access to a store or improve the facilities in employee restrooms.

Strategy: Don’t pass up little-noticed tax breaks on the books. The IRS has issued an online reminder about the tax benefits available for making such accommodations. (IRS e-News for small businesses, Issue No. 2007-33, 11/14/07)

Specifically, the IRS e-bulletin focuses on three key tax breaks for small business owners:

1. Access the disabled access credit. A qualified small business can claim the disabled access credit for expenses that provide greater access to individuals with disabilities. This tax break is limited to businesses with earnings of $1 million or less in the prior year and no more than 30 full-time employees in the prior year. Note: This isn’t a one-time tax break; you can claim the credit for every year in which you qualify.

2. Knock down barriers for a deduction. Your business can deduct up to $15,000 a year for removing architectural and transportation barriers to access by the disabled and the elderly. For example, you might provide additional spaces for disabled or elderly patrons in your parking lot. Normally, these expenses would have to be capitalized.

If your business claims both the disabled access credit and the barrier removal deduction in the same tax year, the deduction must be reduced by the amount of the credit claimed.

3. Hire credit-eligible workers. Under the Work Opportunity Tax Credit (WOTC), which was recently enhanced and extended into 2011, your business generally may claim a tax credit for 40% of the first $6,000 of first-year wages if it hires a member of certain disadvantaged groups. Thus, the maximum credit per worker is $2,400. An individual with a disability qualifies if he or she is certified by the appropriate government agency as being disabled. Your business can claim the credit for a disabled employee once he or she has been employed at least 120 hours or 90 days.

The revised WOTC rules now apply to veterans with a service-related disability. Extra tax incentive: First-year wages taken into account for qualified disabled veterans hired after May 25, 2007, doubles to $12,000. So the maximum credit fort these workers is $4,800.

Tip: View the entire IRS e-bulletin at www.irs.gov/businesses/small/article/0,,id=175291,00.html.

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