How Does Cost Segregation Benefit Me?

If you’re a CPA or financial advisor, I am sure you have an idea of what cost segregation is and it’s monetary benefits. However, you also might wonder how does cost segregation benefit me? Throughout my years in cost segregation and working with CPAs/financial advisors, I have seen several common themes that may be applicable to you and all worth checking out. After all, knowledge is power!

accountant working on cost segregation

Scenario 1:

Let’s say you refer your client to an outside third party to conduct their cost segregation project. If you don’t already have a confident working relationship with that resource, your reputation can be on the line with your client, if something went wrong. Is it worth the risk?

Scenario 2:

On the flip side, say you consider hiring an in-house engineer. Aside from the time it will take you to train the new hire, will the engineer be able to meet his or her billable hours? If you’re planning on only doing a few cost segregation projects per year, does it make sense to invest in hiring someone full-time?

So now what do you do? Ignoring or putting off cost segregation might seem like the easy way out, but the reality is, neglecting cost segregation is depriving yourself from bringing added value to your clients.

Now, how does cost segregation benefit you as the CPA or Financial Advisor? By offering these services, you would potentially increase revenue generated to your business, in addition to bringing added value to your clients. At the end of the day, you’d really set your services apart from other firms.

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The benefit for your clients? Reducing upfront tax liability, which means more upfront cash in their pocket. Imagine, the excitement that would ensue your client when you advise them of those benefits.

Cost segregation is a win-win for everyone.

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Now if you’re reading this and you’re a real estate investor, the benefits of cost segregation are comparable to borrowing money from the government – interest-free. Allowing you to do whatever you want with the cash – use it to make improvements on the building, or better yet – use it for the down payment on your next acquisition.

It’s important to keep in mind that in order to execute a “defensible” cost segregation study, the IRS Audit Technique Guide recommends that the study is prepared by an individual with knowledge of construction and tax law. We go into the nitty gritty of what constitutes a “defensible” cost segregation study, in our blog post: Types of Cost Segregation Studies.

Here at Titan we can teach you how to do cost segregation on your own, saving you from costly resources. Oh, and it won’t hurt to learn cost segregation - as you’d really stand out from the rest!

Ready to get started? It all begins with the Echo Learning Academy, a self-paced training knowledge base that teaches you how to do cost segregation, one step at a time - no experience required.  Just for our readers, we’re giving away a sneak peek of what’s inside the Echo Learning Academy.

While you're at it, run a free and non-obligatory benefit estimate and see how cost segregation could help you: