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Cost segregation is a tax strategy for taxpayers who own properties that are newly purchased, constructed, or remodeled. This strategy can be applied to property owned by individuals, corporations, trusts, or partnerships.

Cost segregation can be a lucrative tax strategy for taxpayers who own commercial or investment property. There are numerous benefits of cost segregation, but it’s not without its downsides. Before you hire a cost segregation company, find out if this strategy is right for you with our breakdown of the pros and cons of cost segregation.

Cost segregation can save your business thousands of dollars now and in the future by accessing property and accelerating depreciation. To take advantage of these tax benefits, you need a firm that specializes in cost segregation studies. But not every cost segregation company is equal. Choosing the wrong company can result in overlooked tax benefits or incorrect calculations that lead to IRS penalties and interest.

Is cost segregation worth it for your property? It depends. While many taxpayers will benefit greatly from cost segregation, this tax strategy isn’t a good fit for all property owners. This may be because the property doesn’t qualify for cost segregation, the drawbacks outweigh the benefits, or for other reasons.

Cost segregation allows you to write off specific costs over five, seven, or 15 years, and this frontloaded depreciation can cut your tax bill significantly. Many costs can be written off through cost segregation — from furniture and office equipment to POS systems and drive-thru equipment.

If you run ACH payments through your bank, you may pay lower fees. In fact, many of the best business banks offer no-fee ACH transfers. However, if you’re looking to integrate ACH payments into your sales processes or want to use their subscription billing tools, the convenience offered by a payment processor may be worth the additional cost.

Automated Clearing House (ACH) payments power most of the bank-to-bank transfers in the United States. ACH is so common that many of us take it for granted, not realizing that the system is used to finalize credit card payments, for direct deposits of paychecks, and in check cashing.

If you plan to rely on ACH transfers for a significant portion of your sales, we recommend getting an ACH processing account through your regular merchant services provider. Most providers offer ACH processing as an optional paid feature, although there are a few high-quality credit card processors that will include it for free.

While businesses tend to interact directly with their payment processor, the processor is just one link in the credit card transaction process. The financial institutions that issue the cards provide the credit, while the credit card networks provide the infrastructure.

Depreciation is a method of writing off an expense over a period of years rather than all at once with a typical tax deduction. Depreciation is used for purchases and expenses that are considered long-term assets, meaning their usefulness lasts longer than one year.