Throughout the years, cost segregation has made a huge impact on food manufacturers, and many people may not even be aware. The team at Engineered Tax Services (ETS) has saved thousands of dollars for food manufacturers via cost segregation studies. ETS does this by providing a detailed engineering review of assets – including special purpose electrical and mechanical systems, site improvements, decorative finishes, and any process related to special purpose construction. ETS is the leader in the specialty tax firm industry and performs hundreds of studies on a monthly basis. One of ETS’s recent cost segregation studies for a food manufacturer led to $98,238 in Total Realized Tax Savings of studies on a monthly basis.
Cost segregation studies can be applied to:
- Food storage
- Delivery systems (including all machinery, equipment, furniture and fixtures used to process food items from storage
through delivery to the customer and more)
This leaves many opportunities for food manufacturers to take advantage of tax benefits.
What Will Your Cost Segregation Study Entail?
A cost segregation study is a very detailed look at all the depreciable assets that a food manufacturer owns – with a focus on assigning each asset to the appropriate depreciation category outlined by the IRS Audit Technique Guidelines. By doing this, one can significantly decrease their tax liability and gain a useful tool for annual tax savings.
At ETS, our cost segregation studies are designed to find assets that fall under 5, 7, and 15-year depreciation categories. By accurately categorizing these assets and using the IRS preferred method of depreciation, one can significantly increase cash flow and reduce tax liability. This can equate to tens of thousands of dollars in annual savings.