Cost Segregation is a Tax Deduction that creates a dollar for dollar tax reduction. As with any deduction, it reduces the amount of income that a client shows as profit, and therefore pays taxes on. Clients by in large had profitable 2023 tax years and paid in accordingly. Thus, a large deduction by performing a Cost Seg study could wipe out most if not all taxation for their 2023 tax year. Considering the vast majority of clients have already pre-paid in heavily based on projected profits, this study instantly frees up the cash flow of all of the money pre-paid in, as well as money they are about to pay in.
Also, with the new changes, any additional benefit may be used by the client either in the future, or carried back up to five open years. Thus allowing the client to potentially recapture taxes paid in previous years.
Decisions on how to take the Cost Seg benefit is case by case and come from several factors. These include the entity type, how many partners there are, are they passive or active, how much have they paid in pre-paid taxes for 2023 tax year, what is their future tax liability, and most importantly: what are their overall goals for this project.
But the first step is getting your Client the landing page so they can fill it out and so we can determine how much is available for the Client!