TOP DRAWER ARTICLE

Steer Clear of Business Tax Schemes
by
HL Carpenter

As a small business owner, you’re always looking for ways to save tax dollars. Unscrupulous promoters know this – and so they approach you with schemes that sound legitimate. Unfortunately, all you end up with is trouble.

Here are two schemes to avoid.

Disabled Access Credit Schemes

In this scam, you’re enticed into investing in systems that purport to communicate business listings to visually or hearing challenged individuals. The scammer claims the systems make your business accessible to the disabled, resulting in a tax credit of as much as $10,250. Don’t believe it!

While tax law does provide a credit for costs associated with making your business comply with the Americans With Disabilities Act of 1990, the systems sold by scammers are not qualified expenditures.

Home-Based Business Schemes

Avoid anyone who suggests you can take an income tax deduction for personal expenses. You can take deductions for a legitimate home-based business, but costs of daily living are not deductible, even if you establish a corporation and draw up ‘legal’ documents saying they are.

You can learn more about these schemes and others by visiting the Internal Revenue web site or talking to a trusted advisor. Saving money is a smart business move. Doing so legally is even smarter.

Originally published March 2009.

Last update: January 8, 2011