Take Advantage of Cost Segregation as Louisiana extends Tax Deadline to February due to Hurricane Impact

In the wake of the recent hurricane that affected many parts of Louisiana, business owners have been granted some much-needed relief: the state has extended its tax deadline to February 2025. This gives business owners more time to gather their documents, recover from damages, and take strategic steps to minimize their tax liabilities. One key tax strategy to consider during this time is cost segregation and at Coastal Cost Segregation Solutions, we can help!

What is Cost Segregation?

Cost segregation is a powerful tax strategy that allows businesses and real estate owners to accelerate depreciation deductions on their commercial properties. By reclassifying certain components of a building (e.g., flooring, electrical systems, or lighting fixtures) as personal property rather than structural, businesses can shorten the depreciation timeline from the standard 39 years to as little as 5, 7, or 15 years.

This reclassification allows business owners to significantly increase their deductions in the early years of ownership, resulting in immediate tax savings and improved cash flow.

Why Cost Segregation is Important Right Now

With the extended deadline, now is the perfect time for Louisiana business owners to take advantage of cost segregation. This strategy can help business owners offset the expenses incurred during hurricane recovery by unlocking substantial tax savings before the new February 2025 filing deadline.

Key Benefits:

1. Increased Cash Flow: Cost segregation can lead to accelerated depreciation deductions, which means more cash in hand to invest in rebuilding and recovery efforts.

2. Maximizing Tax Savings: By utilizing cost segregation, business owners can potentially reduce their tax liabilities significantly, leaving more resources to reinvest into their businesses during this challenging time.

3. Proactive Planning: With the deadline extension, business owners have extra time to conduct a thorough cost segregation study and ensure all qualifying assets are accounted for.

Who Should Consider Cost Segregation?

If you own a commercial building or rental property, especially if it was acquired or underwent significant renovations in the last few years, you may benefit from a cost segregation study. This is particularly useful for:

• Retailers

• Office buildings

• Industrial properties

• Multifamily buildings

• Hotels and hospitality businesses

Even if your building has suffered damages from the hurricane, a cost segregation study can help you recoup losses and reallocate assets for tax purposes.

How to Get Started

If you’re a Louisiana business owner, it’s crucial to act quickly. With the February 2025 extension, you have a golden opportunity to get a cost segregation study done at Coastal Cost Segregation Solutions before filing your taxes. To start, consult with a qualified CPA or a tax professional who specializes in cost segregation. They will work with engineers and tax experts to review your property, identify assets that qualify for accelerated depreciation, and ensure you maximize your tax savings.

The extension of Louisiana’s tax deadline to February 2025 provides some relief for business owners dealing with the aftermath of the hurricane. A cost segregation study is one way to leverage that time to maximize your tax savings and increase cash flow. By acting now, you can ensure that your business takes full advantage of this powerful tax-saving strategy before the new deadline arrives.