No question about it, if you are a business owner who owns a brick and mortar business and is profitable, a cost segregation study can help you keep more of your money. Every business owner can reap the benefits of having an increase in cash flow as well as lowering their income tax burden and this is exactly what a cost segregation study will do for your business. Cost segregation is the process of using accelerated depreciation to reduce income taxes. However, there are also other benefits that one can achieve by having a cost segregation study done by Segregation Holding. Cost Segregation can provide additional tax benefits by identifying assets qualifying for Section 179D expensing. It can reveal opportunities to reduce real estate tax liabilities and identify certain sales and use tax savings opportunities. Under certain circumstances, segregated assets may qualify for a special bonus depreciation allowed by multiple tax reconciliation acts enacted by Congress as well as some other benefits. Let’s take a quick peek at those:
A cost segregation study can maximize tax savings by adjusting the timing of the deductions. Certain assets depreciation life will be shortened using accelerated depreciation and this will decrease tax payments during the early stages of the property’s life. This leads to an increase in cash flow which can be used for additional investment opportunities, current operating needs or even to pay for your child’s college education.
When applying cost segregation an audit trail is created. In the event that your businesses is ever audited, a properly documented cost segregation study can help to resolve any IRS inquires long before they become issues in the eyes of the government. Truth be told, a cost segregation study actually decreases the chance of an audit from happening in the first place. This is due to the fact that cost segregation will place you in Internal Revenue Code Tax Compliance. In the rare event that you do get audited and had your cost segregation study done by Segregation Holding, we will defend our report every step of the way.
- Finally a cost segregation study can capture retroactive savings. Since 1997, taxpayers can capture immediate retroactive savings on property added since 1987. Previous rules, which provided a four-year catch-up period for retroactive savings, have been amended to allow taxpayers to take the entire amount of the adjustment in the year the Cost Segregation is completed. This alone is huge. This opportunity to recapture unrecognized depreciation in the current tax year presents a depreciation windfall.
No time like the present to have your cost segregation study completed. From lower income tax burdens to increased cash flow, a cost segregation study will help your businesses. As long as your business is profitable, we are confident we can help!
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