How Cost Segregation Can Benefit Business Owners According to IRS Guidelines

Cost segregation is a strategic tax planning tool that enables business owners to accelerate depreciation deductions on certain property components, resulting in significant tax savings. According to IRS guidance, this process involves reclassifying assets within a property to shorter depreciation periods, such as 5, 7, or 15 years, instead of the typical 27.5 or 39 years for residential and commercial properties. By doing so, business owners can enhance cash flow and reinvest more capital into their operations. Commonly reclassified assets include electrical systems, plumbing, and specialized finishes, provided they meet the IRS criteria for tangible personal property