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Considering cost segregation for your commercial or investment real estate? The best cost segregation companies help you reap the most tax benefits while remaining compliant with IRS guidelines.
Erica has been writing about small business finance and technology since 2008. She joined Merchant Maverick in 2018 and specializes in researching and reviewing business software, financial products, and other topics to help small businesses manage and grow their operations. Her expertise has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll, a graduate of Limestone University, and currently resides in Greenville, South Carolina.
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Erica SeppalaErica has been writing about small business finance and technology since 2008. She joined Merchant Maverick in 2018 and specializes in researching and reviewing business software, financial products, and other topics to help small businesses manage and grow their operations. Her expertise has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll, a graduate of Limestone University, and currently resides in Greenville, South Carolina.
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Chelsea Krause is a writer who specializes in accounting, payroll, and small business loans. She has been helping small business owners manage their finances since 2016. She is a QuickBooks Certified User and former eCommerce store owner. Her accounting expertise has been quoted in Forbes and her work appears in Startup Nation, Small Business Bonfire, and Women on Business. Chelsea graduated summa cum laude with a BA in English & Creative Writing from George Fox University and studied abroad at the University of Oxford as well.
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Chelsea KrauseChelsea Krause is a writer who specializes in accounting, payroll, and small business loans. She has been helping small business owners manage their finances since 2016. She is a QuickBooks Certified User and former eCommerce store owner. Her accounting expertise has been quoted in Forbes and her work appears in Startup Nation, Small Business Bonfire, and Women on Business. Chelsea graduated summa cum laude with a BA in English & Creative Writing from George Fox University and studied abroad at the University of Oxford as well.
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Our content reflects the editorial opinions of our experts. While our site makes money through referral partnerships, we only partner with companies that meet our standards for quality, as outlined in our independent rating and scoring system.
Cost segregation is a tax strategy that can lower the tax liability of property owners by thousands of dollars. With 100% bonus depreciation now restored, these savings can be even more significant. A cost segregation study is critical to cashing in on these savings.
A cost segregation company specializes in assessing property components for accelerated depreciation, which minimizes tax liabilities for real estate owners. Some companies may also offer additional tax credit services or guidance on Qualified Production Property (QPP) to help businesses save even more on their income tax returns.
In this post, we’ve selected the best cost segregation companies to help you accelerate depreciation on your commercial or investment property.
The best cost segregation companies can provide cost segregation studies that maximize accelerated depreciation while staying compliant with tax codes.
The number of resources alone made KBKG worthy of being on this list. Free tax calculators, tax software, a broad array of tax credit services, and years of industry experience only add to why this company is the overall top cost segregation choice. KBKG also stays at the forefront of evolving tax strategies, including guidance around bonus depreciation and QPP.
KBKG goes the extra mile by providing excellent customer support. The company has a solid number of online reviews -- something we rarely see with cost segregation companies. Beyond that, the reviews are overwhelmingly positive, with clients praising the company's team for professionalism, responsiveness, and the quality and timeliness of completing cost seg studies.
KBKG Tax Services
KBKG offers cost segregation services for property owners and businesses of all sizes across multiple industries. In addition to its cost segregation studies, KBKG also features these services:
R&D tax credits
Fixed asset reviews
Green building tax incentives
Interest Charge Domestic International Sales Corporation (IC-DISC)
KBKG Features
These standout features show why KBKG makes our list of the best cost segregation companies:
Free feasibility analysis: See if you qualify for cost segregation with a free initial analysis.
Free cost segregation calculator: KBKG’s cost segregation calculator provides you with a free two-page report after plugging in information about your property.
Free tax calculators: In addition to the cost seg calculator, KBKG also has free calculators for R&D and R&D payroll tax.
Tax software: KBKG has three paid software solutions for cost segregation, R&D tax credits, and 481(a) adjustments.
Educational resources: KBKG helps taxpayers and professionals stay informed, from tax insights and articles to webinars for CPE credits, including guidance on evolving tax strategies.
How KBKG's Cost Segregation Process Works
To get started with a KBKG cost segregation study, fill out the online proposal request form. Simply select the service you’re interested in, and provide basic information about your property (such as building type, square footage, and address) and some information about yourself to get started with your free analysis.
Before you fill out the form, you can also use the free cost segregation calculator, which provides you with an estimate and a two-page report. Please note that this isn’t a guarantee of tax savings and should only be used to get an idea of whether cost segregation is the right strategy for you.
Choose KBKG If...
You want a highly experienced cost segregation firm
You value free tools and upfront analysis
You want guidance on current tax strategies like bonus depreciation and QPP
With over 15 years of tax experience, Omega Accounting Solutions offers several services surrounding tax credits and incentives to help you get the most out of your next tax return. From cost segregation to R&D tax credits, Omega provides free consultations and easy, secure processes for identifying and claiming eligible deductions and credits.
Omega also offers many other business and financial services you won't find with other cost segregation companies. Omega does all of these things and does them well, as indicated by the many positive reviews from satisfied clients.
Omega Accounting Solutions Tax Services
Omega Accounting Solutions provides cost segregation services, starting with a free initial consultation. If you decide to move forward, your property analysis will be completed by an experienced expert who complies with all tax and building regulations at the federal and state levels.
In addition to cost segregation studies, Omega Accounting Solutions also specializes in:
Here’s why you should consider working with Omega Accounting Solutions:
Expert cost segregation: Following your consultation, you’ll work with an experienced specialist with a tax and engineering background to help you get the most out of cost segregation while remaining compliant with IRS guidelines.
Free feasibility analysis: Easily find out if you qualify for cost segregation with a free initial consultation.
Additional tax credits & incentives: Beyond cost segregation, Omega can help you identify and claim eligible tax credits and benefits.
Additional business services: Omega is a one-stop solution for all of your tax, finance, and business needs, including fractional CFO services, bookkeeping, 1099 filing, and business intelligence reporting.
Excellent support: Omega has received several five-star reviews from clients who praise the company’s responsiveness, knowledge, and easy, straightforward processes.
How Omega Accounting Solutions' Cost Segregation Process Works
Omega Accounting Solutions works with all property owners and real estate investors who qualify for tax segregation.
You can find out if you’re eligible by filling out a quick form with your name, email address, and phone number to set up your free initial consultation.
Choose Omega Accounting Solutions If...
You want help identifying and claiming multiple tax credits
You prefer a provider with broader tax and business services
You want a simple process with a free consultation
Similar to Omega Accounting Services, Engineered Tax Services offers cost segregation and a wide array of other specialty tax services, including R&D tax credits.
Engineered Tax Services uses an engineering-based approach to cost segregation studies and has a proven track record of working with large businesses, including Hilton, Marriott, and Toyota. Given its level of experience in the specialty tax space and the strong number of positive customer reviews, businesses of all sizes -- especially large businesses or investors with multiple properties -- should feel comfortable using ETS for its cost segregation and tax credit services.
Tax Services Provided By Engineered Tax Services
Engineered Tax Services provides cost segregation studies for a variety of industries and properties of all sizes. The company boasts many case studies, with a number of them based on multi-million dollar properties around the nation.
In addition to cost segregation services, you can also count on ETS for:
R&D tax credit
Work Opportunity Tax Credits (WOTC)
Wireless Infrastructure Technology (WIT)
Energy tax credits & deductions
Grant services
Other business tax credits & deductions
Engineered Tax Services Features
Engineered Tax Services has several standout features that make it an obvious choice for cost segregation and tax credits, including:
Free feasibility analysis: You can see if you qualify for cost segregation with a free, no-obligation feasibility analysis.
Free analysis for additional tax credits: While you’re working with ETS, you can also find out if you qualify for R&D, WIT, and other credits and incentives at no cost.
Educational resources: ETS has one of the largest catalogs of resources available for business owners and investors, including case studies, podcasts, webinars, and eBooks.
Excellent customer support: Engineered Tax Services has several reviews and testimonials praising the company for its knowledgeable and responsive reps and its detailed and accurate cost segregation reports.
How Engineered Tax Services' Cost Segregation Process Works
ETS states that individuals, corporations, trusts, or partnerships that have purchased or built real estate in the last 15 years may qualify for cost segregation.
You can find out if your property qualifies by requesting your free cost segregation analysis. This can be done through a form on the ETS website that requests personal information such as your name, email, and phone number, as well as basic information about the project, including the date placed in service, the cost basis for the building, square footage, and entity type.
Choose Engineered Tax Services If...
You have a large or complex property
You want an engineering-based approach to cost segregation
You’re looking for experience with enterprise-level projects
While CSSI doesn't offer numerous tax services, it puts its focus solely on cost segregation and has completed over 60,000 cost segregation studies to date. A free initial property analysis is available to help you realize tax benefits and receive a quote for CSSI's affordable services.
While CSSI can handle large cost segregation studies, the company works with commercial properties valued from $200,000 to $1.5 billion, making it a flexible option for a wide range of property sizes.
CSSI Tax Services
CSSI is best known for cost segregation, but it also offers Section 179D and R&D tax credit services.
CSSI Features
CSSI doesn’t have the bells and whistles you’ll find with some other companies, but it does have a strong reputation for its engineering-based cost segregation studies. Features worth noting include:
Free feasibility analysis: Find out if you qualify with a no-cost, no-obligation feasibility analysis.
Compliance-focused: CSSI puts an emphasis on compliance and ensures that its studies align with IRS guidelines and audit standards.
Cost segregation resources: CSSI has CPE presentations, articles, and cost segregation case studies to educate its clients.
How CSSI's Cost Segregation Process Works
Get started with CSSI by requesting a free property analysis. Simply fill out a short form that includes personal information and basic info about your property (i.e., property type and date acquired) to receive your no-cost, no-obligation analysis.
Choose CSSI If...
You want a firm that specializes in cost segregation
You prefer a straightforward, no-frills approach
You want a provider with a strong track record of completed studies
Experienced team performs studies based on case law & IRS guidelines
Cons
Doesn’t offer additional tax services
Nontransparent pricing
Lack of client reviews
Why We Chose Duffy+Duffy
Performing cost seg studies since 2002, Duffy+Duffy is an established company that focuses its attention solely on performing cost segregation studies without the distractions of other tax services.
Duffy+Duffy has experience with LEED-certified properties, helping owners of sustainable buildings reduce their tax liabilities without overlooking depreciable costs. This specialized experience is less common among cost segregation firms, which is why Duffy+Duffy made this list.
Duffy+Duffy Tax Services
Duffy+Duffy specializes in cost segregation studies. The company does not provide additional tax services.
Duffy+Duffy Features
Duffy+Duffy keeps it simple when it comes to cost segregation. However, there are a few good reasons why the company has been in business for decades, including:
Free feasibility analysis: Receive a free estimate of tax benefits and a fee quote if you decide to have the study performed.
LEED-certified projects: Duffy+Duffy is experienced in performing cost segregation studies for Leadership in Energy and Environmental Design (LEED) certified projects.
Referral program: Contact Duffy+Duffy to learn more about its referral partnership program.
How Duffy+Duffy's Cost Segregation Process Works
You can request a free feasibility analysis through Duffy+Duffy’s online form. The short form takes less than five minutes to complete and requests basic personal information, as well as information about your property.
Duffy+Duffy may request additional information and documentation that can be uploaded through a secure portal.
Choose Duffy+Duffy If...
You have a LEED-certified or sustainability-focused property
You want a firm focused exclusively on cost segregation
Madison SPECS offers a unique Smart Tour where an on-site employee works with a Madison SPECS expert to perform a remote cost segregation study. Utilizing video and digital equipment, this Smart Tour is non-intrusive, offers faster turnaround times, and provides detailed documentation to support IRS compliance.
Since its founding, the company has helped clients of all sizes lower their tax liabilities by over $3 billion.
Madison SPECS Tax Services
Madison SPECS specializes in cost segregation for investment and commercial properties of all types.
Madison SPECS Features
These standout features can help you decide if Madison SPECS is the right cost segregation company for you:
Free initial analysis: A free initial analysis can determine if you’re eligible for cost segregation.
Smart Tour: The Smart Tour kit is used for remote cost segregation studies with faster turnaround times and other benefits.
In-house experts: Madison SPECS employs 60+ in-house professionals, including engineers.
How Madison SPECS' Cost Segregation Process Works
You can get started with Madison SPECS by filling out a contact form for a free quote.
The form is quick and easy to complete — simply enter your name, email address, phone number, property address, and any additional details about your project.
Choose Madison SPECS if...
You prefer a remote cost segregation process
You want a faster, less intrusive study
You like a tech-driven approach with detailed documentation
We spend hours researching and evaluating each cost segregation company we review at Merchant Maverick, placing special emphasis on key characteristics to generate our service provider ratings.
Weighted Rating Breakdown
Features 50%
Fees 35%
User Reviews 10%
Customer Service 5%
When rating cost segregation companies, we use an 18-point rubric that looks at features, fees, customer service, and user reviews. We weigh each section differently to calculate the total star rating.
Features: 50% of the total star rating
Fees: 35% of the total star rating
Customer Service: 10% of the total star rating
User Reviews: 5% of the total star rating
Each section is further broken down into granular, weighted subsections, in which we look at specific attributes, like whether a free initial analysis is available, which cost segregation resources are offered, and availability in all 50 states.
Cost segregation is a tax strategy for property owners and real estate investors. Without cost segregation, property is depreciated using the following timelines:
Commercial properties: 39 years
Residential properties: 27.5 years
Using cost segregation, components of the building are assessed and sorted into four categories:
Land assets
Buildings & structures
Land improvements
Personal property
After categorization, certain building components can be depreciated on an accelerated schedule of five, seven, or 15 years. This frontloading of depreciation lowers tax liability and (in some cases) may even result in a tax refund.
Components that are assessed and categorized may also be eligible for bonus depreciation, which is currently at 100%, resulting in additional tax benefits.
In order to use this tax strategy, a cost segregation study by an experienced team of professionals must be performed.
Who Qualifies For Cost Segregation?
Anyone who has purchased, constructed, or remodeled a commercial or residential investment property may qualify for cost segregation. This could be anyone from a retail store owner to a landlord who rents out a single-family home.
Primary residences do not qualify for cost segregation. In some cases, a second home may qualify if it is used as a rental or income-producing property.
Reputable cost segregation companies offer a free feasibility analysis. During this step, an expert will evaluate the property and your tax situation to determine if you qualify for cost segregation. Following this analysis, you’ll receive an estimate of potential tax benefits, as well as a quote for study fees.
Some companies may have limitations on the properties they work with (i.e., the property must meet a minimum cost basis or value), so make sure to do your research or simply ask about these requirements before moving forward.
What Is A Cost Segregation Study?
A cost segregation study is performed by an experienced team of professionals that may include accountants, engineers, estimators, and tax experts. While it may be possible to perform a basic analysis yourself, we don’t recommend it since the process is complex and mistakes can result in big penalties from the IRS.
A study can be beneficial for commercial or investment properties that were recently acquired, built, or remodeled. While it’s advised to complete a study in the first year the property is placed into service, look-back studies can be performed to help you retroactively claim missed depreciation.
During a cost segregation study, the property will be carefully analyzed and assessed. Building components will be sorted into four categories, which helps determine the appropriate accelerated depreciation schedule for each component. These studies can be performed on-site or remotely using various technologies.
Once the property has been analyzed and all components have been categorized, you will receive a report. These reports (which are typically 30+ pages) include a list of categorized assets, photographs of the property, and references that substantiate the study. This information is then used to report accelerated depreciation on your tax return.
What Costs Can Be Written Off On A Cost Segregation Study?
During a cost segregation study, building components are assessed and categorized into four categories. These categories help determine the appropriate depreciation schedule for each component.
Personal property: Personal property depreciates over five or seven years. Examples of personal property include appliances, signage, furniture, office equipment, and machinery.
Buildings & structures: Residential buildings and structures depreciate over 27.5 years, while commercial buildings depreciate over 39 years. This category includes the building itself, along with structural components such as roofs, concrete foundations, footings, floors, ceilings, windows, and doors.
Land improvements: Land improvements depreciate over 15 years. Land improvements include landscaping, exterior lighting, parking lots, curbing, sidewalks, and fountains.
Land assets: Land assets include land as well as site work used to prepare the land before construction. Land assets are not depreciable.
One of the biggest drawbacks of cost segregation is its associated costs. On the lower end, cost segregation studies cost around $5,000. For larger, more complex properties, costs only continue to rise and can surpass $15,000.
While this upfront cost may be a deterrent for some property owners, the tax benefits that come from segregating costs can often exceed this amount. Some owners see tens or hundreds of thousands of dollars in savings, often in the first year.
If you’re still on the fence, you can use our cost segregation calculator to see how much you could save or reach out to a reputable cost segregation company (start with the six on this list!) for a free feasibility analysis, which gives you a better idea of how cost segregation could benefit you.
How To Choose A Cost Segregation Company
Knowing how to choose a cost segregation company can help you avoid issues and ensure your study holds up under IRS scrutiny. Doing your research is the most important step in choosing a cost segregation company. Look for reputable companies (like those on this list), read user reviews, and don’t be afraid to reach out to ask questions.
Take advantage of any free feasibility analysis that is offered by companies that spark your interest. Not only will this provide you with a quote for fees, but it will also provide an estimate of potential tax savings.
Keeping an eye out for red flags is just as important when looking for a cost segregation company. If fee structures aren’t clearly explained or seem unusually high, proceed with caution. A cost segregation study is a big investment, and you want to make sure you pick the right company for the job.
Erica has been writing about small business finance and technology since 2008. She joined Merchant Maverick in 2018 and specializes in researching and reviewing business software, financial products, and other topics to help small businesses manage and grow their operations. Her expertise has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll, a graduate of Limestone University, and currently resides in Greenville, South Carolina.
View Erica Seppala's professional experience on LinkedIn.
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The vendors that appear on this list were chosen by subject matter experts on the basis of product quality, wide usage and availability, and positive reputation.
Merchant Maverick’s ratings are editorial in nature, and are not aggregated from user reviews. Each staff reviewer at Merchant Maverick is a subject matter expert with experience researching, testing, and evaluating small business software and services. The rating of this company or service is based on the author’s expert opinion and analysis of the product, and assessed and seconded by another subject matter expert on staff before publication. Merchant Maverick’s ratings are not influenced by affiliate partnerships.
Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity. The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.
