Don’t Pay More Than You Owe. Recover Overpaid Taxes This Year.
Need to increase your cash flow and improve your agility immediately? Many business leaders are looking for smart ways to neutralize inflation, high labor costs, supply chain delays, and a looming recession.
If flexibility is your goal, you may want to consider whether you can recover overpaid taxes with a Look-Back Study.
Why Are Property Investors Overpaying Their Taxes?
Property investors often overpay taxes because they overlook how many personal property assets are in a building. These include:
- Built-in cabinetry
- Flooring and wall coverings
- Interior, removable walls
- Specialty HVAC systems
- Telecommunications and network systems
- Security systems and audio-visual systems
According to IRS guidelines, personal property like the above should be depreciated on a shorter timeline than real property. This is good news for investors because shorter depreciation timelines free up cash flow.
Are you looking around your building now and seeing how many personal property assets you neglected to claim? It is likely you, too, have overpaid on your taxes.
How Can You Recover Overpaid Taxes?
If you claimed less depreciation than you were entitled to (i.e. less than the allowable amount), you can take advantage of an approved IRS procedure called automatic consent. This lets you change your accounting method, so you can immediately claim the allowable depreciation amount you deserve.
How immediate is “immediate”? Many property investors are surprised to learn that they can recover previously overpaid taxes through quick refund checks or reductions on their next quarterly tax payment.
Even better, this process is simple. You don’t need to amend your tax returns – all you need to do is fill out IRS Form 3115, Application for Change in Accounting Method and file it with your next estimated quarterly tax payment.
The first thing you need to do to recover your overpaid taxes is to figure out where you could have made more deductions.
How Does a Look-Back Study Help?
A Look-Back Study helps you identify previously unclaimed personal property assets, so you can recover those overpaid taxes.
Investors who request a Look-Back Study from the fixed asset tax experts at Paragon International will receive:
- A complete review of cost capitalizations on previous construction, leasehold improvements, renovations, and acquisitions
- Comprehensive analysis of building assets, incorporating expert insight from our team of fixed asset experts and certified engineers
- Smart suggestions for potential savings areas to reduce property taxes and property insurance premiums
Will a Look-Back Study Benefit You?
However, investors who commissioned accounting-based cost segregation studies in the past are still likely to benefit from a Look-Back Study. Consider one of our clients, who had completed an accounting-based cost segregation study 6 years ago (from another provider) that overlooked more than half of the personal property assets on a $200 million HQ complex.
Their previous cost segregation study had identified just 11.2% of personal property assets, whereas our Look-Back Study found a solid 27.6% of 5-year double-declining balance personal property – all of which they recovered in the current tax year!
Curious to see how much you could save? Get in touch with Paragon and find out.
Serving clients since 1985, Paragon International, Inc. provides independent, impartial and accurate cost segregation analyses, and property valuations and appraisals to assist in and support decisions related to taxes, risk management, investment, financing and corporate planning. Our consultants have extensive fixed asset experience – they’re fixed asset experts. Because of that we are able to offer a unique combination of irreplaceable human resources and advanced technology. We have specialists experienced in valuing closely-held securities, patents and other intangible assets, business enterprises, buildings, equipment and real estate. In addition, Paragon provides complete inventory and asset management services and solutions, including software customization and training, barcode labels and scanners, and tailored inventory services such as data conversion and integration, asset inventories, asset policies, cost reconciliation, and appraisal services. Contact Paragon International to discover how we can help you.