Depreciation Archives - Roger Rossmeisl, CPA

12 Nov 2021

Maximize Your Depreciation with a Cost Segregation Study

If your business is depreciating over a 30-year period the entire cost of constructing the building that houses your operation, you should consider a cost segregation study. It might allow you to accelerate depreciation deductions on certain items, thereby reducing taxes and boosting cash flow. And under current law, the potential benefits of a cost segregation study are now even greater than they were a few years ago due to enhancements to certain depreciation-related tax breaks. Fundamentals of depreciation Generally, business buildings have a 39-year depreciation period (27.5 years for residential rental properties). Usually, you depreciate a building’s structural components, including walls, windows, HVAC systems, elevators, plumbing and wiring, along with the building. Personal property — such as equipment, machinery, furniture and fixtures — is eligible for...

25 Aug 2019

A Good Time to Buy Business Equipment

Roger Rossmeisl, CPA

Small Business Tax Briefs

There’s good news about the §179 depreciation deduction for business property. The election has long provided a tax windfall to businesses. This is because it enables them to claim immediate deductions for qualified assets, instead of taking depreciation deductions over time. §179 was increased and expanded by the Tax Cuts and Jobs Act (TCJA). Therefore, it's a good time to buy business equipment. Even better, the §179 deduction isn’t the only avenue for immediate tax write-offs for qualified assets. Under the 100% bonus depreciation tax break provided by the TCJA, the entire cost of eligible assets placed in service in 2019 can be written off this year. §179 basics The §179 deduction applies to tangible personal property (e.g. machinery and equipment) purchased for use in a trade...

11 Feb 2019

(#496) Depreciation-Related Breaks on Business Real Estate

Roger Rossmeisl, CPA

Taxes

Commercial buildings and improvements generally are depreciated over 39 years, which essentially means you can deduct a portion of the cost every year over the depreciation period. (Land isn’t depreciable.) But special tax breaks that allow deductions to be taken more quickly are available for certain real estate investments. Some of these were enhanced by the Tax Cuts and Jobs Act (TCJA) and may provide a bigger benefit when you file your 2018 tax return. But there’s one break you might not be able to enjoy due to a drafting error in the TCJA. §179 expensing This allows you to deduct (rather than depreciate over a number of years) qualified improvement property — a definition expanded by the TCJA from qualified leasehold-improvement, restaurant and retail-improvement property. The TCJA...

08 Oct 2018

(#406) Could a Cost Segregation Study Help You Accelerate Depreciation Deductions?

Roger Rossmeisl, CPA

Taxes

Businesses that acquire, construct or substantially improve a building — or did so in previous years — should consider a cost segregation study. It may allow you to accelerate depreciation deductions, thus reducing taxes and boosting cash flow. And the potential benefits are now even greater due to enhancements to certain depreciation-related breaks under the Tax Cuts and Jobs Act (TCJA). Real property vs. tangible personal property IRS rules generally allow you to depreciate commercial buildings over 39 years (27½ years for residential properties). Most times, you’ll depreciate a building’s structural components — such as walls, windows, HVAC systems, elevators, plumbing and wiring — along with the building. Personal property — such as equipment, machinery, furniture and fixtures — is eligible for accelerated depreciation, usually over five...

26 Mar 2018