Accounting

Best Cost Segregation Study Services (2024)

We are reader supported. When you make a purchase through our links, we may earn an affiliate commission.

Finding the right cost segregation study services means looking closely for unmatched quality, precision, and reliability in a complex landscape. Among the top contenders, Omega Accounting Solutions and Engineered Tax Services stand out for their comprehensive approaches and client-centric outcomes.

This review aims to shed light on these leading services, providing insights into their unique methodologies, customer satisfaction, and the advantages they offer. After all, whether you’re a seasoned investor or new to the realm of real estate, understanding the nuances of cost segregation can significantly impact your bottom line.

Best for Tax Deductions & Incentives
Best for Larger Properties
Description:

Omega's cost segregation study services are backed by 15+ years of expertise in federal and state tax incentives, ensuring you receive precise, IRS-defensible reports, and unlocking the full potential of your tax strategy annually.

Description:

Unlock immediate savings with a free analysis from Engineered Tax Services, leveraging 20 years of expertise and 30,000 studies for IRS-compliant, seamless tax benefits.

Free Feasibility Analysis:
Yes
Free Feasibility Analysis:
Yes
Additional Tax Credits:
Yes
Additional Tax Credits:
Yes
Customer Support:
Excellent
Customer Support:
Professional and responsive
Best for Tax Deductions & Incentives
Description:

Omega's cost segregation study services are backed by 15+ years of expertise in federal and state tax incentives, ensuring you receive precise, IRS-defensible reports, and unlocking the full potential of your tax strategy annually.

Free Feasibility Analysis:
Yes
Additional Tax Credits:
Yes
Customer Support:
Excellent
Best for Larger Properties
Description:

Unlock immediate savings with a free analysis from Engineered Tax Services, leveraging 20 years of expertise and 30,000 studies for IRS-compliant, seamless tax benefits.

Free Feasibility Analysis:
Yes
Additional Tax Credits:
Yes
Customer Support:
Professional and responsive

What is a cost segregation study?

A cost segregation study is a tax strategy that allows property owners to accelerate the depreciation of their real estate assets by frontloading the depreciation deductions for certain building components, such as wiring, plumbing, and light fixtures. This study involves examining each element of a property and categorizing them to determine if they can be depreciated over shorter periods, typically 5, 7, or 15 years, instead of the standard 27.5- or 39-year timeline.

By doing so, property owners can reduce their tax liability and increase their cash flow in the early years of owning real estate. The study is typically performed by a team of tax and engineering experts. It is recommended to conduct a cost segregation study in the year the building is acquired, constructed, or remodeled to maximize its benefits.

A cost segregation study typically involves four main steps: feasibility analysis, site visit and data collection, preparation of the cost segregation report, and review by the IRS. The benefits of a cost segregation study include maximizing depreciation deductions, minimizing tax liability, and increasing cash flow.

However, it’s important to note that the study isn’t free and can take several weeks to complete. Moreover, it’s advisable to work with a tax professional or tax advisory service to ensure thorough documentation and adherence to IRS guidelines.

Omega Accounting Solutions: Cost Segregation Study

Omega Accounting Solutions has evolved significantly from its roots in fractional accounting to become a comprehensive provider of tax advisory services, emphasizing business intelligence (BI) for cutting-edge analytics and reporting. This expansion reflects Omega’s commitment to leveraging technology and data to inform smarter tax strategies and business decisions.

Their cost segregation studies are just one facet of a broader suite of services designed to optimize tax benefits through meticulous analysis and strategic foresight. With a dedication to innovation, Omega combines traditional accounting excellence with modern BI tools, enabling clients to unlock new levels of financial insight and performance.

Process: Omega begins with a free initial consultation, followed by an in-depth onsite study conducted by their experienced team. This team evaluates properties of all sizes, categorizing building components into strategic tax asset classes to utilize accelerated depreciation, thereby significantly reducing the client’s tax burden both immediately and over the property’s lifetime.

Pros

The personalized approach and free consultation offer a low barrier to entry for clients seeking to explore their options. The comprehensive analysis ensures that no stone is left unturned in the pursuit of tax savings.

Cons

The depth of service might come with a higher price tag, and the process may be more time-consuming due to the thoroughness of the onsite evaluations.

Best for Tax Deductions & Incentives
Fast-forward your finances with Omega's cost segregation study services

Omega's cost segregation study services are backed by 15+ years of expertise in federal and state tax incentives, ensuring you receive precise, IRS-defensible reports, and unlocking the full potential of your tax strategy annually.

We may earn a commission if you make a purchase, at no additional cost to you.

Engineered Tax Services: Cost Segregation Analysis

Engineered Tax Services (ETS) positions itself as a leader in specialty tax practices in the United States, with a mission to deliver advanced tax solutions to the American middle class. This focus has driven ETS to develop a comprehensive range of services that go beyond cost segregation, addressing a broad spectrum of tax planning and advisory needs.

Their engineering-based approach to cost segregation is part of a larger commitment to leveraging expertise across various disciplines—engineering, accounting, tax law—to provide clients with innovative, effective tax strategies. . Particularly for large businesses or investors managing multiple properties, ETS stands out as a trusted provider of cost segregation and tax credit services.

Process: ETS targets a wide range of clients, including individuals, corporations, trusts, and partnerships that have acquired real estate in the past 15 years. The firm offers a free cost segregation analysis through its website, which serves as a preliminary step to determine eligibility and potential benefits without upfront costs.

Pros

The engineering-based approach provides a high level of precision in identifying cost-saving opportunities. The free analysis feature is an excellent tool for clients to assess potential benefits without commitment.

Cons

While the engineering focus is a strength, it may also lead to a more technical process that some clients might find daunting. Additionally, the reliance on online forms for initial engagement could feel impersonal to some.

Best for Larger Properties
Build stronger financials with Engineered Tax Services' cost segregation analysis

Unlock immediate savings with a free analysis from Engineered Tax Services, leveraging 20 years of expertise and 30,000 studies for IRS-compliant, seamless tax benefits.

We may earn a commission if you make a purchase, at no additional cost to you.

How much money could you save with a cost segregation analysis?

The amount of money you can save with a cost segregation analysis depends on several factors, including the type of property, its cost, how much of it qualifies for shorter depreciation periods, and the specific tax situation of the property owner. Generally, cost segregation can lead to substantial tax savings by accelerating depreciation deductions, thereby reducing taxable income and taxes owed in the early years of property ownership.

Here’s a simplified example to illustrate potential savings:

  • Assume a commercial property is purchased for $1 million.
  • A cost segregation study identifies $400,000 of the purchase price that can be reclassified from a 39-year depreciation schedule to 5-, 7-, and 15-year schedules.
  • This accelerated depreciation results in higher depreciation deductions in the early years of ownership.
  • Depending on the owner’s tax rate, this could translate into tens of thousands of dollars in tax savings in the first few years after the study is conducted.

It’s important to note that the exact savings can vary widely. A detailed cost segregation study can provide a more precise estimate based on the specific characteristics of the property and the tax situation of the owner. Consulting with a tax professional or a firm that specializes in cost segregation studies is crucial to understanding the potential benefits in your particular case.

Verdict

Cost segregation analysis stands as a pivotal tax planning strategy, enabling accelerated depreciation and significant tax savings for property owners. This technique demands expertise for effective implementation, highlighting the value of professional consultation to ensure compliance and maximize benefits.

Omega Accounting Solutions and Engineered Tax Services (ETS) are two leading providers in this specialized field. Omega excels in integrating cost segregation with a broader tax strategy, making it ideal for property owners seeking comprehensive tax deductions and incentives. Their approach, enriched by business intelligence, promises not just savings but strategic financial insights.

On the other hand, ETS’s engineering-based methodology and extensive experience make it a go-to for larger businesses or investors with multiple properties. Their proven track record in specialty tax services ensures robust support for complex portfolios, translating into substantial tax advantages.

Choosing between Omega and ETS depends on your property’s specifics and financial objectives. Both firms offer paths to optimized tax savings, but Omega is recommended for those focused on comprehensive tax strategies, while ETS is best suited for managing larger or more complex property portfolios.

Best for Tax Deductions & Incentives
Best for Larger Properties
5.0
5.0
Best for Tax Deductions & Incentives
Best for Larger Properties