Taxpayers are constantly looking for tax deductions that will lower the amount they are liable to pay to the government. Though many companies resort to spending, donations, tax credits, and other methods of deducting from their tax liability, few companies think about the tax benefits that can be found with a cost segregation study.

What Does a San Diego Cost Segregation Study Entail?

A cost segregation study is a detailed look at all the depreciable assets that your company owns with a focus on assigning each asset to the appropriate depreciation category outlined by the IRS Audit Technique Guidelines. Many companies simply place all their assets into 27.5- or 39-year straight-line depreciation when, if separated out, a company can significantly decrease their tax liability and gain a useful tool for annual tax savings.

At Engineered Tax Services, 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, you can significantly increase your cash flow and reduce tax liability. This can equate to tens of thousands of dollars in annual savings.

What Assets Are Included in a Cost Segregation Study?

While your company’s building, or buildings, might depreciate in 27.5 or 39 years, there are plenty of assets your company has that will depreciate much more quickly. For instance, carpet in a corporate building typically lasts five years. When the carpet is lumped in with your company’s building as depreciating every 27.5 or 39 years, your company isn’t taking advantage of the tax deductions available.

When our engineers go through a detailed review of your property they will divide up every asset you have into its correct category, allowing your company to boost the amount of deductions your company receives annually. This review it done by licensed engineers who read detailed blueprints to identify each asset along with the functional purpose of each component. This allows for the differentiation between personal property and real property within each building system identified by the IRS.

These systems include:

  • The Building Structure (walls, windows, roof, concrete…etc)
  • HVAC System
  • Lighting/ Electrical
  • Plumbing Systems
  • Escalators
  • Elevators
  • Fire Protection and Alarm Systems
  • Security Systems
  • Gas Distribution
  • Additional systems may be designated by the IRS.

To find out more about cost segregation studies in San Diego and see if your company qualifies, contact Engineered Tax Services now!

For a complimentary review please use our Cost Segregation information form here.

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