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When it comes to running a business, tax planning often feels like navigating a labyrinth. Yet, understanding how to leverage tax credits can unlock significant benefits for your business, particularly in the realm of accessibility. Whether you are a small business owner or manage a large corporation, partnering with a tax consultant can help you uncover opportunities like the Disabled Access Credit, potentially leading to substantial savings. 

What is the Disabled Access Credit?

The Disabled Access Credit is a nonrefundable tax credit specifically designed for small businesses that incur expenses to provide access to persons with disabilities. According to the Centers for Disease Control and Prevention (CDC), approximately 61 million Americans have some form of disability. Making your business accessible isn’t just a moral obligation; it also opens doors to a broader customer base and demonstrates corporate social responsibility.

A tax consultant can guide you through the eligibility criteria for this credit. In general, the Disabled Access Credit is available to businesses that meet the following requirements:

1. Gross Receipts: The business must have gross receipts of less than $1 million in the previous year or no more than 30 full-time employees during the preceding year.
2. Eligible Expenses: These include expenses related to removing barriers, providing interpreters, offering adaptive equipment, and modifying facilities to accommodate disabled individuals. 
3. Credit Amount: The credit covers 50% of eligible expenses over $250, with a maximum credit of $5,000 per year. 

Leveraging the Barrier Removal Tax Deduction

Another valuable tax benefit is the Barrier Removal Tax Deduction. This deduction allows businesses to claim a deduction for expenses related to removing physical, communication, or transportation barriers. 

Working with a tax consultant can help you take advantage of both the Disabled Access Credit and the Barrier Removal Tax Deduction in the same year, as long as the expenses are not double-counted. Here’s how it works:

• Deduction Limit: Businesses can claim up to $15,000 per year in eligible expenses.
• Qualified Expenses: Expenses that improve accessibility for individuals with disabilities or the elderly, such as modifying walkways, installing ramps, or adjusting restroom facilities.

By consulting a tax consultant, you can strategically plan renovations and upgrades to ensure compliance and maximize your tax benefits.

Combatting Business Fraud: An Ongoing Battle

Business fraud remains a significant challenge, with increasing costs each year. The Association of Certified Fraud Examiners (ACFE) has reported a troubling rise in fraud losses, with the median loss per incident climbing from $117,000 to $145,000 over two years. While this trend is alarming, it also underscores the need for robust fraud detection and prevention strategies.

Your business can employ several tactics to mitigate fraud risk, and a tax consultant can play a critical role in these efforts:

• Implementing Internal Controls: Internal controls, such as surprise audits and management reviews, serve as deterrents against fraudulent activities. By regularly reviewing financial records and conducting audits, businesses can catch discrepancies early.
• Fraud Training: Educating employees about fraud risks and prevention strategies sends a strong message about your business’s commitment to ethical practices. Training programs can empower employees to identify and report suspicious behavior.

Tax consultants can assist businesses in setting up these controls and ensuring compliance with relevant regulations, ultimately helping to safeguard against financial losses.

Historic Renovation Tax Credit: Preserving Heritage and Reaping Rewards

Preserving historical buildings benefits cultural heritage and can yield significant tax advantages for business owners and investors. The Historic Rehabilitation Tax Credit offers a 20% credit for the costs of rehabilitating certified historic buildings, providing a financial incentive to restore and maintain these valuable properties. 

Tax consultants can assist in determining eligibility and guiding the process of claiming this credit. Here’s what you need to know:

• Qualified Buildings: The building must be listed on the National Register of Historic Places or contribute to a registered historic district.
• Rehabilitation Costs: Eligible expenses include renovation, restoration, and rehabilitation costs. However, the credit does not apply to new construction or enlargement.
• Minimum Investment: The cost of the rehabilitation must exceed the greater of $5,000 or the building’s adjusted basis. 

Working with a tax consultant ensures that you meet all criteria and maximize the potential tax benefits of your renovation project.

Navigating IRS Compliance: Addressing Partnership Loopholes

The IRS is intensifying its focus on compliance issues, particularly among high-income earners and partnerships. With funding from the Inflation Reduction Act (IRA), the agency is actively targeting abusive practices such as basis shifting, a complex strategy used to evade taxes.

Tax consultants play a vital role in helping businesses navigate these complexities:

• Understanding Basis Shifting: This involves manipulating the adjusted basis of assets within partnerships to minimize tax liabilities, a tactic the IRS is actively scrutinizing.
• Staying Informed: The IRS is continuously updating guidance to address noncompliance. A tax consultant can keep businesses informed about the latest regulations and ensure adherence to tax laws.

Protecting Taxpayer Dollars: Combating Fraud Schemes

The Treasury Inspector General for Tax Administration (TIGTA) recently uncovered a fraudulent scheme that could have cost taxpayers billions in improper payments. Fraudsters obtained Employer Identification Numbers (EINs) for inactive businesses to claim credits like the Employee Retention Tax Credit and COVID-19-related credits.

Tax consultants can help businesses navigate these challenges by implementing controls and ensuring that claims for credits are legitimate and supported by proper documentation. With the IRS increasing its vigilance, businesses must remain proactive in compliance efforts.

The Role of a Tax Consultant in Business Success

Navigating the intricate landscape of tax credits, deductions, and compliance can be daunting. Partnering with a knowledgeable tax consultant ensures your business maximizes tax benefits while maintaining compliance with regulations. Here’s how a tax consultant can help:

• Identifying Opportunities: A tax consultant can pinpoint tax credits and deductions that align with your business activities and goals, optimizing your tax strategy.
• Streamlining Processes: From documentation to filing, a tax consultant streamlines the process of claiming tax benefits, reducing the administrative burden on your business.
• Ensuring Compliance: By staying informed about the latest regulations, a tax consultant helps your business avoid penalties and audits while maintaining a strong compliance record.

Tax planning is not just a year-end exercise but a strategic element of business growth. With the right guidance, businesses can unlock tax benefits, combat fraud, and ensure compliance, all contributing to long-term success. Contact BML today to learn how we can support your business’s growth and success.