Cost Segregation Studies
Consider a Repair and Maintenance Study to Recover Taxes and Improve Cash Flow
Repair and maintenance expenses are currently tax deductible. Capital costs are not. Through a Repair and Maintenance Study (also known as a Sec. 263(a) Study), you may be able to achieve significant tax savings by reclassifying assets improperly treated as capital expenses. In particular, companies operating in a number of industries may benefit from a Repair and Maintenance Study. These will include many in the banking, retail, hospitality, manufacturing, pharmaceutical, warehouse, auto retailers, distribution and utility industries who regularly refurbish or freshen their stores or facilities. These rules will benefit virtually all capital-intensive companies that invest significant dollars on recurring. Read More.
New Law Extends Tax Relief, Reinstates Estate & Gift Tax
Key Provisions of the Tax Relief Act of 2010 Incentives for Individuals Federal Estate & Gift Taxes Incentives for Businesses On December 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 , or H.R. 4853 (hereafter, “the Act”). The bipartisan legislation extends for two additional years many of the so-called “Bush-era tax cuts” originally enacted under the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). Key provisions of the new law extend the individual and capital gains/dividend tax cuts for all taxpayers through 2012, enact a payroll tax cut for 2011, provide a two-year AMT patch, establish a top estate tax rate of 35 percent with an exclusion of $5. Read More.
New Tax Relief Act Extends Bush-Era Tax Cuts, Includes Business Incentives
Key Provisions of the Tax Relief Act of 2010 Incentives for Individuals Federal Estate & Gift Taxes Incentives for Businesses On December 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 , or H.R. 4853 (hereafter, “the Act”). The bipartisan legislation extends for two additional years many of the so-called “Bush-era tax cuts” originally enacted under the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). Key provisions of the new law extend the individual and capital gains/dividend tax cuts for all taxpayers through 2012, enact a payroll tax cut for 2011, provide a two-year AMT patch, establish a top estate tax rate of 35 percent with an exclusion of $5. Read More.
December 31st Marks Deadline for Some Small Business Jobs Act Tax Benefits
Businesses need to take note that some key provisions of the Small Business Jobs Act of 2010 (the Act) will expire by the end of the month. The Act expanded two income tax expensing provisions as an incentive to encourage businesses to purchase certain types of property. In order to take full advantage of these provisions for 2010 calendar tax years, qualified businesses will need to act quickly, placing property in service as soon as December 31, 2010. Bonus Depreciation Retroactive to January 1, 2010, the Act extended the 50-percent first-year bonus depreciation that previously expired at the end of 2009, giving businesses an important opportunity. Read More.
Some Tax Programs Offer Immediate Savings for Businesses
CB&H’s John Gonella recently wrote in The Garner Citizen about two important opportunities available to help businesses realize immediate tax savings: cost segregation and research and development tax credits . Cost Segregation Studies Cost segregation is a mixture of tax and engineering concepts. When constructing a commercial building such as an apartment complex, warehouse or office space, the owner must capitalize it. That means the owner cannot deduct the cost to build immediately but rather depreciate it over a number of years…. A cost segregation study allows property owners to reclassify their property assets to shorten the depreciation time, which reduces current income tax obligations. By segregating a building’s components, the owner can receive an. Read More.
Your 2009 P&L Statement May Contain Hidden Tax Savings
For many business owners, a close examination of the 2009 P&L may not be a pleasant prospect. However, a Repair vs. Capitalization Review might discover that the “depreciation” line item on your P&L offers a favorable tax deduction. A landmark ruling in 2004, followed by IRS Proposed Regulations this past year, essentially provides businesses an opportunity to reclassify certain capital improvements and the resulting depreciation as repair costs. Covered Expenses The changes largely affect the regular and non-regular costs of building maintenance for owners of real property. This includes outdoor painting, parking lot maintenance, and certain building repairs, including HVAC. Read More.