Tax Deductions (Business Tax Deduction Tips)

Real estate depreciation offers substantial opportunityin every size market. Below are just a few examples
for increasing tax deductions. Most depreciationof cities where cost segregation generates meaningful
schedules are established by simply separating landtax deductions.
and long-life improvements. This simple approach isCity:
lawful but sharply understates lawful depreciation.- New York, NY
About 20-40% of improvements for most properties- Houston, TX
are short-life items. Short life items can be depreciated- Hartford, CT
over 5, 7, or 15 years. There are about 130 short-life- Las Vegas, NV
items that have been determined by legislation, tax- Memphis, TN
court decisions and IRS rulings.- Philadelphia, PA
Real estate depreciation can typically be increased by- Orlando, FL
50-100% for the first 5-7 years of ownership by- Phoenix, AZ
obtaining a cost segregation study. A cost segregation- Atlanta, GA
study precisely values up to 130 components of real- Bridgeport, CT
estate that can be valued as short-life property.- Worcester, MA
By obtaining a cost segregation study, it is possible to- Akron, OH
obtain a windfall of tax deductions by "catching-up"- Harrisburg, PA
previously under-reported depreciation. This one-time- Salt Lake City, UT
"catch-up" can occur in the first tax return filed after- St. Louis, MO
the cost segregation study is performed without filing- Portland, OR
any amended tax returns.- Scranton, PA
Reviewing fixed asset listings (of business personal- Greenville, SC
property) can generate a meaningful amount of tax- Bakersfield, CA
deductions. They often include items that should have- Madison, WI
been expensed, which have been sold or thrown- Chicago, IL
away or which have an excessive depreciation life.- Fresno, CA
Items that should have been expensed include- Riverside, CA
operating expenses (sometimes included by error) and- Albany, NY
maintenance or repairs (which was necessary but did- Indianapolis, IN
not increase the life of the assets or component.)- Birmingham, AL
Section 179 allows business to use up to $108,000 of- Ft. Lauderdale, FL
2006 capital expenditures as tax deductions. Confirm- Baton Rouge, LA
you are not capitalizing assets that could be claimed- Augusta, GA
as a tax deduction.- Honolulu, HI Cost segregation produces tax
Casualty losses also offer opportunity for taxdeductions for virtually all property types, including the
deductions. For a casualty loss, you can deduct: 1) thefollowing:
market value immediately before the casualty less 2)Property Type:
the market value immediately after the casualty less- Medical facility
the amount covered by insurance. The portion that is- Shopping mall
not intuitive is: the market value after the casualty is- Restaurant
much less than the value before plus the cost to- Country club
renovate. Other factors which can and should be- Fast food restaurant
considered for tax deductions are: lost rent/usage,- Power center
stigma (in some cases), construction management,- Hotel
construction risks, and entrepreneurial effort.- Car wash facility
Bad debts are a subjective matter. Judgment is- Convenience store
required to accurately estimate the amount that should- Health spa Almost every industry, including the
be claimed as a tax deduction. If bad debts have notfollowing, can generate cost-efficient tax deductions
been examined carefully for several years, they mayby using cost segregation.
offer a meaningful tax deduction opportunity. (ThisIndustry:
applies to companies who utilize accrual accounting.- Golf courses and country clubs
Companies who use cash accounting can't claim a tax- Transportation equipment manufacturing
deduction for bad debt since they never recognized- Electrical component manufacturing
the revenue.)- Real estate lesser
Do well by doing good. You reduce taxes in several- Apparel manufacturing
ways when making charitable contributions. For- Wood product manufacturing
example, you purchased land 10 years ago for- Plastic and rubber products manufacturing
$200,000, and it is now worth $1,000,000. However,- Furniture stores
you now realize you will never use the land for the- Beverage and tobacco product manufacturing
intended purpose. You can donate the land to a- Building supply dealers
qualified charitable organization and take a taxTax reduction services include federal income taxes,
deduction for $1,000,000. However, you do not have tostate income taxes and property taxes. We do not
pay capital gains taxes on the appreciation.prepare income tax returns. Instead, our advisors
Tax deductions sometimes seem arcane andreview your circumstances and suggest cost
complicated. However, a knowledgeable team ofeffective options to lawfully reduce your income tax
advisors from several fields can reduce your federalliability. 5. O'Connor & Associates is a national
income taxes. The complexity of the tax code makesprovider of commercial real estate consulting services
it difficult for any one personal to be knowledgeable inincluding cost segregation studies, tax reduction,
all areas.feasibility studies, tax return review, apartment
Cost segregation produces tax deductions andinspections .
reduces federal income taxes across the country and