Dry Cleaner Receives $35,000 Income Tax Refund! You can too!
David is the typical small business man. Obligations out the wazoo! If you own a small business of any kind you know what I’m talking about! Problems galore, solutions too few!
David, unlike many small business people, decided to search further than the norm…too push the envelope. He asked his CPA, “what can I do to save money?” “Are there any tax strategies I can employ to cut my taxes?” Fortunately for David, his CPA had heard of cost segregation though he didn’t understand it. He recommended for David to “look around.” Being an aggressive dry cleaner owner he did…and he found SHLLC in a Google search. Segregation Holding LLC.
The first thing we did was learn what David, as a dry cleaner magnate, wanted to accomplish. He shared his needs of a reduced tax burden. He wanted a better cash flow. He actually wants a tax refund…can you believe it? That day was a good day for his dry cleaner business. We showed David how we could identify certain assets within his dry cleaner building that qualify for “accelerated depreciation.” That terms simply means changing the depreciation period from long-term to short-term. In most instances that means moving from 39 years to 5 years or 15 years. Inside the dry cleaner building the assets are called “tangible personal property.” Outside the dry cleaner building they are called “land improvements.”
At this point, David asked to have a free assessment performed. This is a simple process. We have a client questionnaire that takes 5 minutes to complete. David completed it while our consultant sat with him in case he had questions. He took advantage of our option to upload a depreciation schedule since that gives SHLLC the real IRS asset basis. We completed the benchmark analysis for his dry cleaner facility the same day. Our consultant, Meredith McNair, shared the good news with David. We estimated a 14% asset reallocation to 5-year class…12% to 15-year. He would get a $21,000 income tax refund from the IRS! No dry cleaner owner has been happier! David engaged SHLLC to complete his study. A member of our team of engineers conducted a site survey of his dry cleaner property. The engineer took dozens of pictures cataloging the assets for IRS verification. He also performed laser measurements to ensure accuracy of site data.
When our engineer returned to the office, some serious number crunching began. Construction drawings were confirmed, invoices verified, closing documents and appraisal scrutinized. No document was left unsearched and unsubstantiated. The IRS takes cost segregation work seriously. Segregation Holding LLC does too. The results? SHLLC reallocated 14% to 5-year, .4% to 7-year and 23.8% to 15-year. This small business, a local dry cleaner in Fort Worth, Texas, got over $36,000 in federal income tax refund! Wow! Incredible! Amazing! David is scheduled to be back from Hawaii in February (or so the story goes). Seriously. Do you own a dry cleaner? Maybe a pawn shop? Perhaps a restaurant or Mom ‘n Pop business where you built out your space? Leasehold or tenant improvements qualify too. In fact, many times the percentage reallocated to 5-year depreciation is even higher. Why? Simple…the “structure” is owned by the landlord. Mom ‘n Pop own their business…the tenant space they built out.
Listen, we make the process simple. Go to our client questionnaire. Fill it out. It takes 5 minutes if you type slowly. Armed with real numbers, take it to your CPA. Confirm what you have learned here. What have you got to lose? $20,000? $30,000? More? It’s your time…is 5 minutes worth finding out how much you can get back?
This dry cleaner did. You should too!
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Want your questions answered now? Call us at 972-865-9050 or 443-Cost-Seg.
We’re here to help get your hard earned money back in your pocket!