Overpaying in Taxes on Your Rental Property? Let’s Fix That.
If you own rental properties or commercial real estate, you probably know about depreciation but here’s what they don’t tell you: you don’t have to wait 27.5 or 39 years to get your tax savings.
Yep, you read that right.
There’s a way to speed up depreciation and slash your tax bill now instead of waiting decades. It’s called cost segregation, and most investors have no idea it exists which means they’re leaving serious money on the table.
At Insogna CPA, a top-rated CPA firm in Austin, Texas, we specialize in helping real estate investors keep more of their money. Let’s break this down so you can see exactly how cost segregation works and why it might be the smartest tax move you make this year.
Most Property Owners Are Overpaying on Taxes: Here’s Why
Most real estate investors follow the standard depreciation schedule:
- Residential rental properties depreciate over 5 years.
- Commercial buildings depreciate over 39 years.
This means you slowly deduct your property’s value over time, getting small tax savings every year.
But here’s the problem: Not every part of your building needs to be depreciated at the same slow rate.
The IRS allows you to break down your property into different asset categories, so things like lighting, HVAC systems, flooring, and electrical work can be depreciated way faster (5, 7, or 15 years instead of 27.5 or 39).
Translation? Cost segregation lets you front-load your tax savings, so you get bigger deductions NOW instead of waiting decades.
How Cost Segregation Puts More Money in Your Pocket
Let’s do some quick math so you can see how this actually plays out.
Example: Standard Depreciation vs. Cost Segregation
Let’s say you buy a $1 million rental property and follow the standard depreciation rules:
Without cost segregation:
- You deduct $36,360 per year over 27.5 years ($1M ÷ 27.5).
- Your tax savings trickle in slowly over time.
With cost segregation:
- You identify $300,000 worth of assets (carpets, lighting, HVAC, etc.) that qualify for faster depreciation.
- Instead of waiting, you deduct $300,000 immediately (or within a few years).
- That’s instant tax savings that free up cash for reinvesting, renovations, or scaling your portfolio.
That’s real money back in your pocket instead of sitting on the IRS’s balance sheet.
Is Cost Segregation Right for You?
Cost segregation isn’t for everyone, but if you check any of these boxes, it’s time to look into it:
- You own a rental property or commercial building worth $500,000+.
- You recently purchased, renovated, or built a property.
- You want to reduce taxable income and boost cash flow this year instead of waiting.
Pro Tip: If you own multiple properties, cost segregation can compound your tax savings across your entire portfolio.
How to Get Started (Without the Headache)
If cost segregation sounds complicated, don’t worry. We handle the heavy lifting for you.
Here’s how it works:
- Book a consultation with Insogna CPA, an experienced Austin tax accountant who knows real estate tax strategies inside and out.
- We connect you with a cost segregation specialist to analyze your property.
- You get a detailed breakdown of how much immediate depreciation you can claim.
- We update your tax return to reflect the new deductions, lowering your taxable income right away.
You’re Probably Overpaying in Taxes: Let’s Change That.
Most property owners miss out on cost segregation because they don’t know about it. Now that you do, what are you going to do about it?
At Insogna CPA, a trusted CPA firm in Austin, Texas, we help real estate investors pay less in taxes, keep more cash, and scale smarter...
Let’s find out if cost segregation makes sense for your property. Schedule a tax strategy session today!