Today is March 15th, no need to “beware the Ides of March“, unless you’re Julius Caesar.

Or unless you have a huge unmitigated and unplanned for tax liability. That’s almost like being stabbed in the back.

If you qualify as a Real Estate Professional or an Active Participant, you have a great tax hedge with Bonus Depreciation on your cost segregation study.

Too many investors and CPAs wait until Q4 (the last minute), or even Q1 (too late) to plan. Tax planning is Tax Strategy, and very important. If you are an active investor and business person, spend the money to meet and strategize with your CPA a few times a year. The return should be worth it. Don’t wait until there is little to no time to know where you stand.

Cost segregation is an important tax strategy tool that should not be relegated to a year-end decision for several reasons:

• A cost segregation study for a January or February acquisition can be used to off-set your June 15 and/or Sep 15 estimated tax payments. No need to wait for the benefit until you file next year.
• You should know your tax liability impact on a quarterly basis. Then you will know what potential acquisitions and/or dispositions make the most sense.
• 100% Bonus Depreciation expires 12/31/2022, don’t wait. We have many clients loading up on acquisitions to build a carry-forward reserve of deductions. It will not expire.
• If you have investors and wait until late Q4, this can delay your K1s. Push the investors to commit once the acquisition is complete. Avoid the year-end “mad rush” to get results.

Whether evaluating the impact of a cost segregation on a $50M property, or a $500K short term rental, the concept is the same. Don’t wait. Get it done early. Be prepared.

Know where you stand and what you will owe Uncle Sam, or not. Reducing tax liability increases you cash flow and ability to invest in more properties.