7 Best Cost Segregation Companies in 2024: Features Compared

Thinking about cost segregation for your commercial or investment property? Top cost segregation firms can maximize your tax benefits while ensuring you meet IRS rules.

In this article, I've gathered a list of six leading cost segregation companies known for their reliability and efficiency. These firms can greatly assist you. Let’s begin.

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7 Best Cost Segregation Companies

• Remote Cost Seg – Best Cost Segregation Company Overall
• Omega Accounting Solutions – Best Additional Tax Credits & Incentives
• KBKG – Best for Free Feasibility Analysis & Cost Seg Calculator
• Engineered Tax Services – Best for Large Businesses & Properties
• CSSI – Best for Small Businesses & Properties
• Duffy+Duffy – Best for LEED-Certified Projects
• Madison SPECS – Best for Remote Cost Segregation Studies

Remote Cost Seg – Best Cost Segregation Company Overall

Remote Cost Seg stands out as a top cost segregation company, celebrated for its expertise, advanced technology, and client-centric approach. Their experienced team uses proprietary software and offers personalized service, ensuring significant tax savings for clients.

Even with its high-quality services, Remote Cost Seg keeps pricing competitive, providing excellent value. Their affordable solutions offer great returns on investment, making cost segregation accessible to more property owners and investors.

They recognize that each property and client has unique needs, tailoring their services to fit. Detailed consultations are provided to help clients grasp the potential tax savings and the methodology of their cost segregation studies.

Pros

• A team of highly experienced professionals with diverse expertise
• Uses advanced software and 3D modeling for precise analysis
• Offers personalized service with clear and open communication
• Proven history of achieving substantial tax savings
• Provides an extensive array of tax-related services
• Ensures excellent value for investment
• Supplies educational resources and ongoing support

Cons

• The process can be intricate and may need considerable client participation
• Upfront costs might be higher but are often balanced by long-term savings
• Comprehensive studies might take time to finish

Remote Cost Seg Features

• Experts in engineering, tax law, and real estate
• Utilizes advanced technology for accurate cost segregation analysis
• Improved asset identification and reclassification
• Provides comprehensive reports in line with IRS guidelines
• Offers extra services to boost tax savings
• Assists with asset disposal and related tax considerations
• Spots opportunities for further savings
• Provides webinars, seminars, and resources to empower clients
• Guarantees exceptional value for clients

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Omega Accounting Solutions – Best Additional Tax Credits & Incentives

With 15 years of tax experience, Omega Accounting Solutions specializes in various services related to tax credits and incentives to maximize your tax return benefits. Omega offers free consultations and simple, secure processes for claiming deductions and credits from cost segregation to ERC.

Omega also provides numerous other business and financial services that set them apart from other cost segregation companies. Their excellent service is reflected in the many positive reviews from happy clients.

Omega Accounting Solutions starts its cost segregation services with a complimentary initial consultation. If you choose Omega, an experienced expert will conduct your property analysis, adhering to all federal and state tax and building regulations.

Besides cost segregation studies, Omega Accounting Solutions excels in:

• Employee retention credits (ERC)
• ERC loans
• Research & development (R&D) tax credits
• High Road Cannabis Tax Credits (HRCTC)
• Accounting & bookkeeping services
• Financial & business services

Pros

• Complimentary initial consultation
• Outstanding customer support
• Access to additional tax and business services
• Stellar public reputation

Cons

• Opaque fee structure
• Lack of a knowledge base or help center

Omega Accounting Solutions Features

Here’s why Omega Accounting Solutions is worth considering:

• Expert Cost Segregation: After your consultation, you'll collaborate with a specialist experienced in tax and engineering to maximize your cost segregation benefits while staying IRS compliant.
• Free Feasibility Analysis: Discover your eligibility for cost segregation with a free initial consultation.
• Additional Tax Credits & Incentives: Beyond cost segregation, Omega assists with claiming R&D credits, ERC, and other tax benefits.
• Comprehensive Business Services: Omega is a one-stop solution for all your tax, finance, and business needs, including fractional CFO services, bookkeeping, 1099 filing, and business intelligence reporting.
• Exceptional Support: Omega has earned numerous five-star reviews for its responsiveness, expertise, and straightforward, easy processes.

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KBKG – Best for Free Feasibility Analysis & Cost Seg Calculator

KBKG earns its spot on this list due to its extensive resources. With free tax calculators, tax software, a wide range of tax credit services, and years of industry experience, it's the top choice for cost segregation. KBKG also stands out for its excellent customer support.

The company boasts many online reviews, which is uncommon among cost segregation firms. These reviews are overwhelmingly positive, with clients commending the team for their professionalism, responsiveness, and the quality and speed of their cost segregation studies.

KBKG provides cost segregation services to property owners and businesses of all sizes across various industries. Alongside their cost segregation studies, KBKG offers:

• Employee Retention Credits (ERC)
• R&D tax credits
• Fixed asset reviews
• Green building tax incentives
• Interest Charge Domestic International Sales Corporation (IC-DISC)

Pros

• Complimentary feasibility analysis
• Outstanding customer service
• Tax benefit calculators

Cons

• Opaque fee structure
• Absence of live chat support

KBKG Features

These standout features highlight why KBKG is among the top cost segregation companies:

• Complimentary Feasibility Analysis: Determine your eligibility for cost segregation with a free initial analysis.
• Free Cost Segregation Calculator: KBKG’s unique and useful cost segregation calculator generates a free two-page report based on your property details.
• Free Tax Calculators: Besides the cost segregation calculator, KBKG offers free calculators for ERC, R&D, and R&D payroll tax credits.
• Tax Software: KBKG provides three paid software solutions for cost segregation, R&D tax credits, and 481(a) adjustments.
• Educational Resources: KBKG informs taxpayers and professionals with tax insights, articles, and webinars for CPE credits.

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Engineered Tax Services – Best for Large Businesses & Properties

Like Omega Accounting Services, Engineered Tax Services (ETS) offers cost segregation and a wide range of specialty tax services, including ERC and R&D claims. ETS employs an engineering-based approach to cost segregation studies and has a proven track record with large businesses such as Hilton, Marriott, and Toyota.

With extensive experience in the specialty tax arena and numerous positive customer reviews, ETS can confidently rely on businesses of all sizes, particularly large companies or investors with multiple properties, for cost segregation and tax credit services.

ETS conducts cost segregation studies for various industries and property sizes. The company has numerous case studies, many involving multi-million dollar properties nationwide.

In addition to cost segregation, ETS offers services for:

• Employee Retention Credits (ERC)
• R&D tax credits
• Work Opportunity Tax Credits (WOTC)
• Wireless Infrastructure Technology (WIT)
• Energy tax credits & deductions
• Grant services
• Other business tax credits & deductions

Pros

• Free feasibility analysis
• Additional tax services available

Cons

• Nontransparent fees
• Several customer service complaints

Engineered Tax Services Features

Engineered Tax Services boasts several standout features, making it an excellent choice for cost segregation and tax credits, including:

• Complimentary Feasibility Analysis: Determine your eligibility for cost segregation with a free, no-obligation analysis.
• Free Analysis for Additional Tax Credits: Discover if you qualify for ERC, WIT, R&D, and other credits and incentives at no cost while working with ETS.
• Educational Resources: ETS offers an extensive catalog of resources for business owners and investors, including case studies, podcasts, webinars, eBooks, and more to educate clients.
• Excellent Customer Support: Many reviews and testimonials highlight ETS's knowledgeable and responsive representatives and the detailed, accurate cost segregation reports they provide.

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CSSI – Best for Small Businesses & Properties

While CSSI doesn’t provide an array of tax services, it specializes exclusively in cost segregation, having completed over 45,000 studies. They offer a free initial property analysis to help you identify tax benefits and receive a quote for their affordable services. Though capable of handling extensive studies, CSSI focuses on commercial properties valued between $200,000 and $1.5 billion.

Unlike some other companies on this list, CSSI doesn’t offer additional tax services, concentrating solely on cost segregation studies.

Pros

• Free initial consultation
• Strong focus on compliance
• Completed 45,000+ cost segregation studies

Cons

• Doesn’t offer additional tax services or resources
• Nontransparent pricing
• Limited customer support avenues

CSSI Features

CSSI may lack the extra features of some other companies, but it’s well-regarded for its engineering-based cost segregation studies. Notable features include:

• Free Feasibility Analysis: Determine your eligibility with a no-cost, no-obligation feasibility analysis.
• Compliance Focused: CSSI emphasizes compliance, ensuring all 13 points outlined in the tax code are addressed in each cost segregation study.
• Cost Segregation Resources: CSSI offers CPE presentations, articles, and case studies to educate clients on cost segregation.

>> Expert Cost Segregation With CSSI >>

Duffy+Duffy – Best for LEED-Certified Projects

Performing cost segregation studies since 2002, Duffy+Duffy is a well-established firm that concentrates solely on cost segregation without the distractions of other tax services. They have experience with LEED-certified properties, assisting owners of sustainable businesses in reducing their tax liabilities while ensuring no depreciable costs are missed.

This level of expertise is rare among cost segregation companies, earning Duffy+Duffy a spot on this list. Specializing exclusively in cost segregation studies, they don’t offer additional tax services.

Pros

• Free initial analysis
• Referral program available
• Experienced team performs studies based on case law & IRS guidelines

Cons

• Doesn’t offer additional tax services
• Nontransparent pricing
• Lack of client reviews

Duffy+Duffy Features

Duffy+Duffy keeps it straightforward with cost segregation, and there are several reasons they've been in business for decades:

• Free Feasibility Analysis: Get a free estimate of potential tax benefits and a fee quote if you choose to proceed with the study.
• LEED-Certified Projects: Duffy+Duffy specializes in cost segregation studies for Leadership in Energy and Environmental Design (LEED) certified projects.
• Referral Program: Learn about Duffy+Duffy's referral partnership program by contacting them directly.

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Madison SPECS – Best for Remote Cost Segregation Studies

Madison SPECS introduces a unique Smart Tour where an on-site employee collaborates with a Madison SPECS expert to conduct a remote cost segregation study. This non-intrusive Smart Tour offers faster turnaround times and creates a video trail for IRS documentation using video and digital tools.

Since its founding, the company has helped clients of all sizes reduce their tax liabilities by over $3 billion. Madison SPECS specializes in cost segregation for various investment and commercial properties.

Pros

• Free feasibility analysis
• Smart Tour cost segregation kit
• Uses tax and engineering approaches

Cons

• Doesn’t offer additional tax services
• Nontransparent pricing
• Lack of client reviews

Madison SPECS Features

These standout features can help you decide if Madison SPECS is the right cost segregation company for you:

• Free Initial Analysis: Determine your eligibility for cost segregation with a complimentary initial analysis.
• Smart Tour: The Smart Tour kit enables remote cost segregation studies, offering faster turnaround times and additional benefits.
• In-House Experts: Madison SPECS boasts over 60 in-house professionals, including engineers.

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Methodology for Choosing the Best Cost Segregation Companies

I reviewed over 12 companies specializing in cost segregation, encompassing those that focus solely on this service and specialty tax firms offering multiple tax credits and incentives for businesses.

In my evaluation, I considered customer reviews, the range of services provided, the availability of a free consultation, the quality of customer support, and the overall industry reputation for ensuring that only the best and most reputable options made our list.

Best Cost Segregation Companies – Buyer’s Guide

What Is Cost Segregation?

Cost segregation is a tax strategy for property owners and real estate investors. Normally, the real estate cost segregation is depreciated over the following timelines:

• Commercial Properties: 39 years
• Residential Properties: 27.5 years

Cost segregation assesses and categorizes building components into four groups:

• Land assets
• Buildings & structures
• Land improvements
• Personal property

This categorization allows specific building components to be depreciated on an accelerated schedule of five, seven, or 15 years, reducing tax liability and sometimes leading to a tax refund.

Some components may qualify for bonus depreciation, offering further tax benefits. To implement this strategy, an experienced team of professionals must conduct a cost segregation study.

Who Qualifies for Cost Segregation?

Purchasing, constructing, or remodeling a commercial or residential investment property may qualify for cost segregation. This includes many property owners, from retail store owners to landlords renting out single-family homes.

Primary residences don’t qualify for cost segregation. However, second homes might qualify if certain conditions are met.

Reputable cost segregation companies often provide a free feasibility analysis. In this initial step, an expert assesses your property and tax situation to determine eligibility for cost segregation. Following the analysis, you'll receive an estimate of potential tax benefits and a quote for the study fees.

It's important to note that some companies may have property value requirements. Make sure to research or inquire about these limitations before proceeding.

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What Is a Cost Segregation Study?

A cost segregation study is conducted by an experienced team of professionals, including accountants, engineers, estimators, and tax experts. Although it might be possible to perform a cost segregation study yourself, it’s not recommended due to the complexity of the process and the risk of significant penalties from the IRS for mistakes.

A study should be carried out on any commercial or investment property that was recently acquired, built, or remodeled. Ideally, the study should be completed in the first year the property is put into service. However, look-back studies can be performed to claim depreciation retroactively.

How Do Cost Segregation Studies Work?

Before hiring a cost segregation company, it's crucial to understand how a cost segregation study operates.

The property undergoes a detailed analysis and assessment during a cost segregation study. Building components are categorized into four groups, which determine their accelerated depreciation schedules. These studies can be performed on-site or remotely using various technologies.

After the analysis and categorization, you'll receive a comprehensive report, usually over 30 pages long. This report includes a list of categorized assets, photographs of the property, and references supporting the study. You can use this information to report accelerated depreciation on your tax return.

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What Costs Can Be Written Off On a Cost Segregation Study?

During a cost segregation study, building components are evaluated and placed into four categories, which determine their accelerated depreciation schedules. The four categories are:

1. Personal Property: Depreciates over five or seven years. This includes items like appliances, signage, furniture, office equipment, and machinery.
2. Buildings & Structures: Residential buildings depreciate over 27.5 years, while commercial buildings depreciate over 39 years. This category encompasses the building itself and structural components such as roofs, concrete foundations, floors, ceilings, windows, and doors.
3. Land Improvements: Depreciates over 15 years. Includes landscaping, exterior lighting, parking lots, curbing, sidewalks, and fountains.
4. Land Assets: Includes the land and site work used to prepare the land before construction. Land assets aren’t depreciable.

Is a Cost Segregation Study Worth It?

Here are a few key points to remember before deciding.

One major drawback is the cost. On the lower end, these studies can start around $5,000. Costs can rise significantly for larger or more complex properties, often surpassing $15,000.

Despite the upfront expense, the tax benefits from cost segregation can easily outweigh the initial cost. Many property owners see savings in the tens or hundreds of thousands of dollars within a few years.

However, cost segregation isn't suitable for everyone. Your property must qualify, and you need to evaluate the benefits versus the drawbacks.

If you're unsure, use our cost segregation calculator to estimate potential savings. Alternatively, contact a reputable cost segregation company (begin with the six on this list!) for a free feasibility analysis to better understand how cost segregation could benefit you.

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Who Can Benefit From Cost Segregation Services?

Commercial property owners who have recently constructed, expanded, or purchased buildings may qualify for cost segregation services. Those who have missed depreciation deductions in previous tax years can reclaim them through a one-time "catch-up" adjustment, allowing them to take the deductions immediately instead of spreading them over multiple fiscal years.

What Are the Benefits of Cost Segregation Services?

Cost segregation services offer commercial property owners significant tax savings, increased cash flow, and reduced tax liabilities. Property owners can decrease their taxable income by reclassifying assets and taking advantage of tax-deferred investments. These services assist property owners in complying with tangible property regulations, providing supporting documentation for IRS audits, and deferring tax payments by treating tax savings as an interest-free loan.

Sub-Services and Features

Here are eight sub-services related to our Cost Segregation Services and their benefits:

1. Cost Segregation Analysis: Accurately determine which assets qualify for cost segregation, resulting in significantly reduced tax liabilities and increased cash flow.
2. Newly Constructed Buildings: Perform cost segregation studies on newly constructed buildings to achieve more significant tax savings through bonus depreciation.
3. Existing Buildings: Conduct cost segregation studies on existing buildings, which can allow you to reclaim overlooked depreciation deductions from previous tax years.
4. Purchase Price Allocation: Our specialists can allocate the purchase price of a building to maximize tax benefits, leading to increased cash flow and tax savings.
5. Leasehold Improvements: Identify leasehold improvements that qualify for accelerated depreciation, reducing tax liabilities and boosting cash flow.
6. Real Property Analysis: Conduct a real property analysis to pinpoint assets that qualify for cost segregation, leading to more significant tax savings through bonus depreciation.
7. Cost Segregation Study Review: We can review your cost segregation study to ensure it complies with IRS guidelines, providing peace of mind and confidence in its accuracy and compliance.
8. Recovery Periods: Separate building assets into shorter recovery periods to enjoy increased tax savings, improved cash flow, and reduced tax liabilities.

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Best Cost Segregation Companies – FAQs

Is a Cost Segregation Study Worth the Cost?

Yes, a cost segregation study can offer substantial tax savings and increased cash flow for commercial property owners, making it a worthwhile investment.

Will a Cost Segregation Study Trigger an IRS Audit?

While there's no guarantee that a cost segregation study won't trigger an IRS audit, a well-executed study that adheres to IRS guidelines can provide robust supporting documentation if an audit occurs.

What Is Bonus Depreciation?

Bonus depreciation is a tax incentive enabling businesses to deduct a percentage of the cost of qualified property in the year it is put into service.

Final Thoughts

Choosing the right cost segregation company can significantly impact your investment's financial outcomes. After thorough analysis and consideration of various providers, Remote Cost Seg stands out as the top recommendation.

Their meticulous attention to detail, expertise in tax laws, and commitment to maximizing returns make them a trusted partner for any investor looking to optimize their property's depreciation schedules.

When selecting a cost segregation service, it's essential to consider factors such as experience, precision, and customer service quality areas where Remote consistently excels. By leveraging their services, investors can enjoy substantial tax savings and improved cash flow, crucial for long-term success in real estate investment.

Remember, every property and investor's situation is unique, so consulting with a professional who can tailor their services to meet your needs is beneficial.

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