Friday 28 November 2014

How to Save Tax Using Cost Segregation Report?

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You need to take proper strategies for reduced tax liabilities, accelerated depreciation and increased cash flow for business operation. There are many scopes to defer tax obligations brought by federal and state taxation laws. You need to consult experts in making a cost segregation report for optimum analysis of cost and depreciation for any type of tangible business property. There are many advantages of analyzing cost segregation.

• It significantly minimizes income tax and other property taxes under Sec 179d.
• This study is performed by a qualified third party analyst so the report gets through the IRS review easily.
• This study helps in deducting accelerated depreciations. Thus, you get instant cash flow benefits. 
• You can catch up with the earlier depreciations of assets that of supposedly misclassified

You must insist on a properly analyzed cost segregation report in some specific situation to help you save on your tax payment.

• You should consult with any reputed ca firms in kolkata during construction, remodeling, or procuring of new buildings. This will allow the investor to efficiently optimize tax and classification of assets.
• At the planning stage of any production. This is the best time indeed in adhering to the cost segregation study. 
• After completion of a project. Thus, you can effectively get a ‘flashback’ to the project so that you can effectively identify the missed out depreciation heads and tax assessment for your assets. 

The following professionals are eligible to carry out a cost segregation study.

• A tax consultant who is well-versed with search 179d and engineering and construction related tax assessment.
• A consultant should have the knowledge of ever changing and amended tax laws.
• He should have complete insights of prior legal cases and judgment related to commercial assets. 
• The consultant should have a comprehensive knowledge on the tax benefits for different enterprise zones.
• He should be totally familiar with the IRS audit guidelines. It will help you to get accurate study that will be approved by IRS verification.

The study for cost segregation may involve the following factors for a clean and optimal tax saving analysis.

• A complete review of cost incurred in purchasing, building or remodeling a property. This may include invoices, depreciations, payments to the contractors etc.
• A rigorous inspection for the functionalities and the condition of a purchased property. 
• Identification of all construction costs and proper classification of assets for optimum tax benefits.
• In case the property is located in any proposed enterprise zone, then proper assessment is needed as per the relaxation of tax in such zones.

From the above insights, you will clearly realize when it is the right time to go for cost segregation as your sole tool for cutting down tax.

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