Tax Planning

Best Cost Segregation Study Services: An In-Depth Review of Omega Accounting Solutions

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In the world of real estate investment, one of the most effective strategies to maximize tax savings and increase cash flow is through a Cost Segregation Study.

Among the myriad of firms offering this service, Omega Accounting Solutions stands out as a leading provider. With over 15 years of experience, Omega Accounting Solutions has established a reputation for delivering accurate, fully compliant, and IRS-defensible reports. This blog post will provide an in-depth review of their services, focusing on their process, benefits, case studies, and client testimonials.

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.

About Omega Accounting Solutions

Omega Accounting Solutions is a financial and tax advisory firm based in Irvine, California. The company was founded by Jay Woods in 2007 and has since grown from a regional accounting firm to a thriving national business. Over the past 16 years, Omega has expanded its services beyond fractional accounting to include tax advisory services, with a focus on business intelligence (BI) for innovative analytics and reporting.

Omega Accounting Solutions empowers small and medium-sized businesses (SMBs) to make better-informed decisions by simplifying complex daily challenges through expert accounting, tax consulting, and business intelligence technologies. The company has a loyal client network and has been recognized for its rapid growth, ranking 75th on the Inc. 5000 list.

Omega Accounting Solutions offers comprehensive tax strategy services, including cost segregation studies. These studies are a strategic tax planning tool that allows companies and individuals who have constructed, purchased, expanded, or remodeled any kind of real estate to increase cash flow by accelerating depreciation deductions and deferring federal and state income taxes.

What Is A Cost Segregation Study?

A cost segregation study is a tax savings strategy that allows individuals and companies who have purchased, constructed, expanded, or remodeled any kind of real estate to increase cash flow by accelerating depreciation deductions and deferring federal and state income taxes.

In essence, a cost segregation study is an analysis performed by tax professionals or engineers to identify and reclassify personal property assets that are grouped with real property assets to shorten the depreciation time for taxation purposes, typically from 39 years (commercial real estate) or 27.5 years (residential rental property) to 5, 7, or 15 years. This reclassification increases the upfront depreciation expenses, thereby reducing the taxable income in the early years of property ownership.

The components of a building or improvement are broken down into categories, including but not limited to: land improvements (such as landscaping, parking lots, and sidewalks), personal property (such as non-structural elements, movable machinery and equipment, and furniture), and the building itself. The study aims to identify all construction-related costs that can be depreciated over a shorter time period than the building.

By accelerating depreciation, property owners can defer taxes and improve cash flow significantly in the early years of owning a property. However, it’s a complex process that requires a detailed understanding of both the tax code and the construction process, making it essential for those considering a cost segregation study to consult with professionals specialized in this field.

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.

The Process

Omega Accounting Solutions has a straightforward three-step process for their Cost Segregation Studies.

  1. Discover If You Qualify: The process begins with an initial consultation with their in-house professionals. This step helps to evaluate if your property qualifies for a Cost Segregation Study.
  2. Expert Cost Segregation Study: The Omega team performs an onsite study to evaluate your properties and sort building components for accelerated depreciation1.
  3. Maximize Income Tax Savings: The final step involves utilizing your accelerated depreciation to significantly reduce your tax burden.

The Benefits

Cost Segregation Studies offer several benefits to real estate property owners. By accelerating their depreciation expenses, property owners can offset taxable liabilities and increase cash flow.

The primary benefits of a cost segregation study include:

  • Maximizing depreciation deductions on new construction or renovations.
  • Optimizing purchase price allocations on acquisitions of properties.
  • Realizing immediate tax savings on demolition write-offs.
  • Determining true insurable replacement cost after exclusions.
  • Establishing real market value after exemptions for property tax.
  • Recovering lost benefits from past years without amended returns.

Case Study: A Hypothetical Example

To illustrate the potential benefits of a cost segregation study, let’s consider a hypothetical example. Suppose a company purchases a commercial property for $5 million. Without a cost segregation study, the entire cost of the property would be depreciated over 39 years, resulting in annual depreciation deductions of approximately $128,205.

However, with a cost segregation study, certain components of the property can be reclassified into shorter-lived asset categories. Suppose the study identifies $1 million worth of property that can be depreciated over 5 years. This would increase the annual depreciation deductions for the first five years by $200,000, resulting in significant tax savings.

This example illustrates the potential tax benefits of a cost segregation study. However, the actual results will depend on the specific characteristics of the property and the taxpayer’s tax situation.Please note that this is a hypothetical example and not a real-life case study. The actual tax benefits of a cost segregation study can vary significantly depending on a variety of factors, including the nature of the property, the taxpayer’s tax bracket, and current tax laws.

Client Testimonials

Omega Accounting Solutions has received overwhelmingly positive reviews from their clients. They have a 4.9-star rating with 61 reviews. Clients have praised the company for their professionalism, responsiveness, and thorough work.

One client stated, “Working with Omega Accounting Solutions has been a great experience. I cannot recommend them enough. ERC taxes can be overwhelming, but everyone at Omega was helpful and kind“.

Conclusion

Omega Accounting Solutions offers a comprehensive and expert service for conducting Cost Segregation Studies. Their process is straightforward and designed to maximize tax savings for their clients. The benefits of their service are clear, with case studies demonstrating significant tax savings.

Furthermore, their high client satisfaction ratings attest to their professionalism and expertise. For real estate property owners looking to reduce their tax burden and increase cash flow, Omega Accounting Solutions is a top choice for Cost Segregation Studies.

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.