Iowa's Best
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Cost Seg Iowa is the top source for high quality cost segregation services. From the bustling city of Des Moines to Cedar Rapids, Davenport, Pella, Sioux City, Iowa City, Council Bluffs, Oskaloosa, Ames, Dubuque, Ankeny, West Des Moines, and more.
Are you overpaying your business taxes?
As a business owner, it's important to understand that paying taxes is an unavoidable part of running your business. However, it's also your responsibility to ensure you're paying only what is legally required.
By minimizing your tax burden, you can reinvest more of your profits back into your employees, family, and community. This not only helps to grow your business but also helps to support those around you. We will help you explore all legal tax-saving options available to you to help maximize your potential for success. |
Your savings will vary, but our clients typically average over $75,000 from a single cost segregation study!
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3 reasons to do a cost segregation study
Increase cash flowGain a significant boost to your cash flow which allows you to reinvest back into the business, pay down debt, or take on new projects. |
Clarify financialsUnderstand the appropriate tax lives of your assets to make your financials more accurate and execute more informed investment decisions |
Reduce taxesBy accelerating deductions, a cost segregation study can result in significant tax savings over a standard approach your CPA might use. |
OUR GUIDECost Segregation 101 |
What is cost segregation?
Cost segregation is a tax strategy that helps you save money on your business taxes. When you buy a building, you can use cost segregation to separate the building's costs into different categories based on how long it will take for them to wear out. This can help your business claim bigger tax deductions sooner, which means you can save money on taxes and have more money to spend on the business.
It's kind of like separating your clothes into different piles for washing - you wouldn't wash your dirty socks with your nice clean shirts, right? Cost segregation is similar, but instead of clothes, it separates a building's costs into different piles for tax purposes.
Are cost segregation studies legal?
Yes, cost segregation studies are legal and allowed by the IRS. In fact, the IRS has formally outlined the rules in its 268 page Cost Segregation Audit Techniques Guide! if a business owner is interested in doing a cost segregation study, they can rest assured that it is a legal and valid way to save money on their taxes.
While the rules and regulations surrounding cost segregation have evolved over the years, the strategy itself has remained a popular and effective way for business owners to reduce their tax burden. As with any tax strategy, it's important to work with a qualified professional and ensure that everything is done in compliance with IRS regulations.
Can I DIY a cost segregation study?
Similar to taxes, it's possible to do a study on your own, but most of us wisely get professional help. Given the complexity of the analysis, there are many potential pitfalls such as mis categorizing eligible assets or making mistakes on the IRS forms. Most importantly, if the study is not done in full compliance with IRS regulations, it could result in costly penalties and fees.
Using qualified professionals ensure your tax savings are in compliance. They also provide a peace of mind with many offering free audit support. So while it's technically possible to a DIY cost segregation study, it's best to save your time, money, and headache in the long run and leave it to the professionals!
How much does a cost segregation cost?
The resources needed to conduct a cost segregation study can vary based on a number of factors. This includes the size and complexity of the building, the location, and the specific assets that need to be identified.
It's important to keep in mind that the cost of the study is almost always outweighed by the potential tax savings that can be generated. In fact, your free benefit estimate will specifically outline the ROI you can achieve with a cost segmentation study. If the benefit does not significantly outweigh the expense, we will be the first to tell you it's not a good fit!
Can I benefit from a cost segregation if I lease space?
If you leases commercial space instead of owning it, you may still benefit from cost segregation if you made improvements to the leased space. For example, if you lease a store and installed a new lighting or HVAC system, you may be able to claim those improvements as separate assets and depreciate them over shorter periods of time. This can result in tax savings for the business, even if you don't own the building.
It's important to work with a licensed professional to determine eligibility and make sure everything is done correctly. So even if a business doesn't own the space they operate in, cost segregation may still be an option for them!
Does a Farm in rural Iowa qualify for a cost segregation study?
If you own a farm, you might be wondering if you can benefit from a cost segregation study. The answer is yes! Farms often have a significant amount of depreciable assets such as ranches, tractors, trailers, and other land improvements. By working with a tax professional who specializes in cost segregation, you can make sure you're taking advantage of all the tax benefits available to you as a farm owner.
What are the downsides of a cost segregation?
While cost segregation is a valuable tax strategy, there are a few potential downsides for some businesses. Most importantly, cost segregation studies are only beneficial if you have a tax liability to offset. If your business is already in a low tax bracket or is not generating significant taxable income, the benefits may be limited.
Finally, assuming your business freezes in time, you could be paying more taxes in 10-15 years time as all depreciations have been claimed. However, it's important to keep in mind that this scenario is rare. In most cases your business will reinvest tax savings into new assets or pursue other tax planning strategies. Overall, while there are potential downsides to cost segregation studies, the benefits usually outweigh any potential drawbacks.
Why have I never heard of this?
If you just learned about cost segregation and are feeling overwhelmed, there's no need to worry! Many CPAs and bookkeepers do not perform this type of analysis and therefore may not be able to recommend this strategy to their clients. Because of the engineering experience required, most businesses will seek out experts in this area to ensure that they are getting the most comprehensive and accurate analysis possible.
Cost segregation is a tax strategy that helps you save money on your business taxes. When you buy a building, you can use cost segregation to separate the building's costs into different categories based on how long it will take for them to wear out. This can help your business claim bigger tax deductions sooner, which means you can save money on taxes and have more money to spend on the business.
It's kind of like separating your clothes into different piles for washing - you wouldn't wash your dirty socks with your nice clean shirts, right? Cost segregation is similar, but instead of clothes, it separates a building's costs into different piles for tax purposes.
Are cost segregation studies legal?
Yes, cost segregation studies are legal and allowed by the IRS. In fact, the IRS has formally outlined the rules in its 268 page Cost Segregation Audit Techniques Guide! if a business owner is interested in doing a cost segregation study, they can rest assured that it is a legal and valid way to save money on their taxes.
While the rules and regulations surrounding cost segregation have evolved over the years, the strategy itself has remained a popular and effective way for business owners to reduce their tax burden. As with any tax strategy, it's important to work with a qualified professional and ensure that everything is done in compliance with IRS regulations.
Can I DIY a cost segregation study?
Similar to taxes, it's possible to do a study on your own, but most of us wisely get professional help. Given the complexity of the analysis, there are many potential pitfalls such as mis categorizing eligible assets or making mistakes on the IRS forms. Most importantly, if the study is not done in full compliance with IRS regulations, it could result in costly penalties and fees.
Using qualified professionals ensure your tax savings are in compliance. They also provide a peace of mind with many offering free audit support. So while it's technically possible to a DIY cost segregation study, it's best to save your time, money, and headache in the long run and leave it to the professionals!
How much does a cost segregation cost?
The resources needed to conduct a cost segregation study can vary based on a number of factors. This includes the size and complexity of the building, the location, and the specific assets that need to be identified.
It's important to keep in mind that the cost of the study is almost always outweighed by the potential tax savings that can be generated. In fact, your free benefit estimate will specifically outline the ROI you can achieve with a cost segmentation study. If the benefit does not significantly outweigh the expense, we will be the first to tell you it's not a good fit!
Can I benefit from a cost segregation if I lease space?
If you leases commercial space instead of owning it, you may still benefit from cost segregation if you made improvements to the leased space. For example, if you lease a store and installed a new lighting or HVAC system, you may be able to claim those improvements as separate assets and depreciate them over shorter periods of time. This can result in tax savings for the business, even if you don't own the building.
It's important to work with a licensed professional to determine eligibility and make sure everything is done correctly. So even if a business doesn't own the space they operate in, cost segregation may still be an option for them!
Does a Farm in rural Iowa qualify for a cost segregation study?
If you own a farm, you might be wondering if you can benefit from a cost segregation study. The answer is yes! Farms often have a significant amount of depreciable assets such as ranches, tractors, trailers, and other land improvements. By working with a tax professional who specializes in cost segregation, you can make sure you're taking advantage of all the tax benefits available to you as a farm owner.
What are the downsides of a cost segregation?
While cost segregation is a valuable tax strategy, there are a few potential downsides for some businesses. Most importantly, cost segregation studies are only beneficial if you have a tax liability to offset. If your business is already in a low tax bracket or is not generating significant taxable income, the benefits may be limited.
Finally, assuming your business freezes in time, you could be paying more taxes in 10-15 years time as all depreciations have been claimed. However, it's important to keep in mind that this scenario is rare. In most cases your business will reinvest tax savings into new assets or pursue other tax planning strategies. Overall, while there are potential downsides to cost segregation studies, the benefits usually outweigh any potential drawbacks.
Why have I never heard of this?
If you just learned about cost segregation and are feeling overwhelmed, there's no need to worry! Many CPAs and bookkeepers do not perform this type of analysis and therefore may not be able to recommend this strategy to their clients. Because of the engineering experience required, most businesses will seek out experts in this area to ensure that they are getting the most comprehensive and accurate analysis possible.
Examples from Across Iowa
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Ankeny, IA based restaurant owner performed a cost segregation study on their newly constructed building that cost $1.2 million. The study resulted in an estimated tax benefit of $100,000. |
Ames, Iowa medical practice owner performed a cost segregation study on their recently constructed building for $3.5 million. The study found an estimated tax benefit of $350,000. |
Protect Your Profits Today
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Local professionals have helped hundreds of Iowa businesses reduce their tax burden. If you're ready to protect your profits, give us a call to get your free benefit estimate.
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