Could someone shed some light on this. Someone told me that say for example if you owe $10,000 in taxes, if you purchase a business that $10,000 can go into that business and you wont have to owe $10,000 in taxes.
Is this true? If not could you please explain more about this in detail.
Thankyou
That’s somewhat of a clumsy interpretation of the US tax code (if you are talking about the US).
Under the right circumstances and assuming it’s all legitimate:
You can invest money into a business, then deduct that amount from your taxable income. So, if I make 100k this year, but I also invest 10k into a new business that I’m forming, it could be possible for me to deduct that 10k from my income. Them I would pay taxes on 90k.
Note that I don’t deduct 10k from my tax liability. I deduct 10k from my taxable income, which is very different!
If you already owe 10k, making an investment doesn’t erase that existing tax liability. Sometimes you can refile an old tax return to correct mistakes, but I don’t think that’s what you’re talking about.
There are lots of rules and details about this kind of thing so please be careful before making financial moves - be sure you understand how the taxes work!
thanx for the quick reply. Yea im going to look more into this as i know its legal as my friends parents decided to purchase a business by putting a down payment (probably before taxes were filed) and theirfore did not have to pay as much taxes.
I think works like this:
Say you have to pay $10K in taxes, you dont know 100% yet but lets say its 10K and in november for example you decide to purchase a business for $20K, then your $10K worth of taxes you will have to pay next year goes away, since you’re spending $20K on a new business and putting a $10K down payment on it.
Im sorry if i’ve confused you or if it doesnt sound right, im gonna have to talk someone at HRblock or something about this lol. As i create/buy a couple of new/existing businesses each year
Re-read what Sagewing said, since it doesn’t sound like you understood it.
Also, do yourself a favor and talk to a real accountant if you need advice, not H&R Block.
I’ll second that. Everyone here would own a business if all you had to do was spend money on one to avoid your tax liabilities. 
Steve
That’s not exactly how it works. 
Going to HR Block is probably a good idea - they can walk you through these kinds of tax scenarios at inexpensive rates.
H&R Block is a perfectly reasonable choice for someone who is on a budget and doesn’t have a complex tax situation. They are ‘real’ accountants as much as any other firm is (a combination of CPAs, EAs, and preparers) and for literally hundreds of thousands of people there is little to be gained by going to a more sophisticated service.
I would never take my [really complicated] taxes to HR Block, but I recommended them to a friend of mine just last week - she has a simple 1040, married filing joint - it’s cheap!
I know people who have not had such a good experience there, but I agree that it probably depends on the office and how complex your taxes are. Your friend probably could have used TurboTax for even less if she just had a job, a house, and maybe some interest and dividends and/or kids.
I’d rather go to a CPA that someone referred me to for business tax advice than roll the dice with whoever the nearest H&R Block office has hired for a few months to handle tax season for individuals.