Summary of What This Blog Covers:
- Introduces Cost Segregation as a Strategic Tax Tool for Women-Owned Businesses
This blog explains how cost segregation accelerates depreciation on commercial properties, allowing women entrepreneurs to significantly reduce their taxable income and reinvest those savings into growth, hiring, or additional real estate investments. - Clarifies When and How Cost Segregation Works
It breaks down the difference between standard and accelerated depreciation, provides real-world examples of tax savings, and outlines which types of property owners—especially those who’ve purchased or renovated commercial real estate—can benefit from a cost segregation study. - Covers IRS Compliance and Long-Term Planning Considerations
From proper W9 and 1099 NEC filings to managing depreciation recapture through a 1031 exchange, the blog highlights the importance of working with a certified public accountant who ensures full IRS compliance and helps business owners plan strategically for future property sales. - Positions Insogna CPA as a Trusted Tax Partner for Women Entrepreneurs
The blog emphasizes how Insogna CPA supports clients beyond tax filing, offering real estate-specific tax strategy, cost segregation coordination, and a full-service approach tailored to the goals and values of women-led businesses.
You’ve Built the Business. Now Let’s Make Sure Your Property Is Working for You, Too.
Owning commercial property is more than a real estate move, it’s a strategic investment. It signals growth, stability, and long-term vision. And for women entrepreneurs especially, it’s a bold step toward independence and equity in a space historically dominated by others.
But here’s something most business owners aren’t told: your property can do more than house your business. It can reduce your tax bill. Significantly.
At Insogna CPA, a woman-focused Austin, Texas CPA firm, we work with business owners who are ready to look beyond surface-level savings and make tax strategy an active part of their wealth-building plan.
Enter: cost segregation.
If you’ve purchased or renovated commercial property, and no one has mentioned this strategy to you, it’s time we had a conversation.
What Is Cost Segregation?
Cost segregation is a tax strategy that accelerates depreciation on commercial real estate. Instead of treating your entire building as a single asset that depreciates slowly over 39 years, this strategy breaks down the property into faster-depreciating components. Giving you access to larger tax deductions early on.
Think of it like this: if your building is a cake, cost segregation lets you slice it into ingredients—flour, sugar, butter—so you can get a better understanding of its value. And in this case, a better way to write it off on your taxes.
How Standard Depreciation Works (The Slow Way)
Let’s walk through the traditional approach. If you purchase a commercial building for $1 million:
- Under IRS rules, you typically deduct around $25,600/year in depreciation
- That’s over 39 years to fully write off your building
- Meanwhile, your cash flow may be tight, and your need for capital is high, especially in the first few years of ownership
It’s not that the deduction isn’t useful. It’s just not enough, fast enough, when you’re trying to grow a thriving business.
The Cost Segregation Approach (The Strategic Way)
With cost segregation, your building is broken down into components with shorter depreciation schedules, such as:
- 5-year assets: Carpet, furniture, appliances, certain fixtures
- 7- to 15-year assets: Landscaping, sidewalks, parking lots, HVAC units
- 39-year assets: The structural building elements (roof, foundation)
Result:
You accelerate the depreciation of certain assets, resulting in much higher deductions in the first few years, precisely when you’re making your largest investments in staff, marketing, and expansion.
We work with engineers and tax specialists to conduct cost segregation studies and ensure the strategy is IRS-compliant, then our certified public accountants near you build the tax strategy around it.
Real-World Example: Cost Segregation in Action
Let’s say you purchase a building for $1 million, and $850,000 is allocated to the building (land doesn’t depreciate).
Without cost segregation:
You take $21,794/year in straight-line depreciation.
With cost segregation:
You might be able to write off $150,000–$250,000 in the first five years.
That could lower your tax liability by tens of thousands of dollars, freeing up capital you can use immediately.
Why Cost Segregation Matters for Women-Owned Businesses
Women-led businesses are growing at record rates but we also know that women business owners often reinvest more of their income back into their operations.
That means cash flow matters.
Cost segregation supports this reinvestment mindset by:
- Freeing up working capital that would otherwise be tied up in long-term depreciation
- Reducing taxable income in years when your business needs flexibility
- Supporting strategic goals like hiring, expanding, or entering new markets
- Helping you compete with larger companies that have long relied on this exact same strategy
As your Austin, TX accountant, we don’t just look at what the numbers say. We look at what they mean for your day-to-day business decisions and long-term goals.
Is Cost Segregation Right for You?
It could be, if you:
- Purchased a commercial property for $500,000 or more
- Made significant renovations or upgrades to an existing property
- Own retail, office, medical, warehouse, or hospitality space
- Operate a short-term rental property
- Plan to sell your property in the future and want to optimize tax timing
Even if you bought the property years ago, you may be able to apply cost segregation retroactively and recover missed deductions by amending past tax returns.
Your licensed CPA near you can help you explore this option safely and strategically.
How Insogna CPA Supports Women Entrepreneurs
At Insogna CPA, we offer more than just tax prep. We offer partnership, mentorship, and strategy for growth-minded business owners, especially women who are scaling their enterprises with purpose.
Here’s how we support you through the cost segregation process:
- We evaluate your property and improvements to determine the viability of a study
- We coordinate with certified cost segregation engineers for thorough, IRS-compliant reports
- We integrate the findings into your depreciation schedule and tax filings
- We guide you in reinvesting the tax savings for maximum long-term impact
Our team includes chartered public accountants, certified professional accountants, and taxation accountants who specialize in real estate, business ownership, and proactive planning.
We understand that you’re not just managing a property, you’re growing a vision.
What About IRS Compliance?
Let’s address the elephant in the room: yes, cost segregation is highly technical, and yes, the IRS watches closely. That’s why it’s critical to do it right the first time.
At Insogna CPA, we provide full compliance support, including:
- W9 tax form collection from contractors
- 1099 NEC filings for vendors paid $600+
- FBAR filing if your income involves foreign bank accounts
- Proper Schedule E or C classification, depending on how the property is used
- Audit support and proactive documentation strategies
Compliance isn’t just a box we check. It’s a mindset we build into your entire tax planning process.
Don’t Forget Depreciation Recapture And How to Manage It
If you’ve been depreciating property for years, and then sell, the IRS will want their cut back. It’s called depreciation recapture, and it’s typically taxed at 25%.
But there’s a solution: the 1031 exchange.
This strategy allows you to defer the taxes by reinvesting proceeds into a like-kind property. We’ve helped clients defer six-figure tax bills by coordinating 1031 exchanges across multiple states.
Our CPA firm in Austin, Texas handles:
- Exchange timelines and deadlines
- Coordination with qualified intermediaries
- Multi-state compliance for complex portfolios
- Real-time planning so you never get caught off guard
The Real Estate Tax Planning Checklist
Before you file, make sure you’ve:
✔ Evaluated your property for cost segregation opportunities
✔ Filed depreciation properly (including land/building split)
✔ Documented improvements vs. repairs
✔ Issued W9s and 1099s as needed
✔ Explored a 1031 exchange if you’re selling
✔ Discussed REPS or STR qualifications if applicable
✔ Partnered with a certified CPA near you who understands commercial property strategy
Why Women-Led Businesses Choose Insogna CPA
We’re more than a filing service. We’re a firm that champions women entrepreneurs, from first investment to exit planning.
Why our clients stay with us:
- We provide real-time tax help, not just once-a-year meetings
- Our team includes certified CPAs, enrolled agents, and certified general accountants
- We specialize in services accounting tailored to property owners
- We bring clarity to complex real estate tax rules
- We offer strategic planning that scales with your business and lifestyle goals
Whether you’re managing your first office space or scaling across states, we’re here to help you navigate the tax landscape with confidence and with a plan.
Let’s Put Your Property to Work for You
You invested in real estate for good reasons. Now it’s time to make sure that investment is working just as hard for your business as you are.
Book a consultation today with Insogna CPA, your trusted Austin tax accountant and strategic advisor for women-owned businesses. Together, we’ll explore whether cost segregation is right for you and start building a tax plan that reflects your vision, values, and next big step.
Because real estate isn’t just an asset, it’s a strategy. And you deserve to get every dollar of value from it...