J.K. Lasser's Small Business Taxes 2013: Your Complete Guide to a Better Bottom Line

Special Rules for Improvements for the Elderly and Handicapped

The Americans with Disabilities Act (ADA) may require you to make certain modifications to your office, store, or factory if you have not done so already. You may have to install ramps, widen doorways and lavatories to accommodate wheelchairs, add elevators, or make other similar changes to your facilities to render them more accessible to the elderly and handicapped.

These modifications may be more in the nature of capital improvements than repairs. Still, the law provides 2 special tax incentives to which you may be entitled. One is a tax credit; the other is a special deduction. These incentives allow for a current benefit rather than requiring capitalization of expenditures that will be recovered over long periods of time.

Disabled Access Credit

Small business owners can claim a tax credit for expenditures to remove barriers on business property that impede the access of handicapped individuals and to supply special materials or assistance to visually or hearing-impaired persons.

Small business

Businesses with gross receipts of no more than $1 million (after returns and allowances) or no more than 30 full-time employees for the tax year before the year of the credit. Full-time employees are those who work more than 30 hours per week for 20 or more calendar weeks in the year.

The credit cannot exceed 50% of expenditures between $250 and $10,250. The maximum credit is $5,000.

Example

You, as a small business ...