We are partners with the Nation’s leading full-service stimulus consulting firm specializing in local, state and federal incentives. To date, GMG has assisted in securing over $500M through it’s custom consulting process.
Cost Segregation Study Overview
Engineering based cost segregation studies permit commercial real estate owners to reclassify real property for depreciation purposes and reclassify it as more rapidly depreciating personal property. This reclassification results in significant cash flow benefits in both present and future years through considerably shorter depreciable tax life and accelerated depreciation methods.
Cost Segregation has evolved from similar processes used in the 1970s and 1980s to complete investment tax credit studies. Investment Tax Credit (ITC) – When this credit was repealed in 1986, most assumed cost segregation studies provided no further benefit under the new tax law. However, in 1997 a landmark tax court case, Hospital Corporation of America succeed in defending the application of engineering-based cost segregation as a viable method to differentiate real and personal property under existing law.
In 2004 the IRS released the Audit & Technique Guideline, making clear the expected process of performing a successful Cost Segregation Study. This opened the doors for many small and midsize companies to begin taking advantage of what was previously only pursued by larger companies.
Any commercial property owner who has done the following since 1987:
Purchased a commercial building or facility
Constructed a new commercial building
Renovated, remodeled, restored or expanded an existing facility
Paid for facility leasehold improvements
What are the Benefits?
According to the U.S. Treasury Department, “Cost Segregation Studies are a lucrative tax strategy that should be considered in almost every real estate purchase.”
An average Cost Segregation Study offers approximately $150,000 in additional depreciation per $1 million dollars in purchase or construction cost over the normal 39 year straight line method.
“Cost Segregation Studies are a lucrative tax strategy that should be considered in almost every real estate purchase.” -U.S. Treasury
“…Cost Segregation Studies should be performed by qualified individuals or firms such as those employing personnel competent in design, construction, auditing, and estimating procedures relating to building construction.” -U.S. Internal Revenue Service
GMG utilizes a team of highly qualified professionals adhere to the IRS recognized Detailed Engineering Approach to perform all Cost Segregation Studies. This methodology maximizes benefits and assures that IRS guidelines are followed.
An initial consultation along with a feasibility report is conducted to determine the cash flow and net present value (NPV) benefits. The consultation allows our professionals to evaluate your current tax status and your future business plans along with your CPA to determine if a study would be of benefit.
The initial consultation is a simple and quick process. To schedule your consultation,
please contact us.
WOTC stands for the Work Opportunity Tax Credit and is not one but several tax credits given to employers at a Federal level for hiring qualified employees. Annually employers claim over $1 billion in tax credits under this program. There is no limit on the number of individuals an employer can hire to qualify to claim the tax credit.
The success and growth of this income tax credit for business is beneficial for all who participate, while increasing America’s economic growth and productivity.
History of the Program
Hiring Incentives have been a part of our country’s infrastructure since the early 1940’s. At that time most Hiring Incentives were focused on Veterans returning to work after periods of service. This continued to be the main focus for Hiring Incentives until the 1970’s and 1980’s when the focus was expanded to include Ex Felons, and Welfare Recipients.
There was a dramatic shift and expansion to Hiring Incentives in the late 1990’s throughout the 2000’s which opened the door for “Job Creation” as the focus for Hiring Incentives. As a part of this change the Work Opportunity Tax Credit (WOTC) was created in 1996 and has been modified, extended and consolidated with existing Hiring Incentives repeatedly since.
The credit was scheduled to be eliminated in 2015, but the PATH Act signed in December 2015 reinstated the tax credit and extended it through December 31, 2019.
What are the Benefits?
WOTC allows employers to claim a credit against their federal income tax liabilities for qualified employees. WOTC can also be used to offset AMT (Alternative Minimum Tax). Employers generally can earn a tax credit equal to 25% or 40% of a new employee’s first-year wages, up to the maximum for the target group to which the employee belongs. Employers will earn 25% if the employee works at least 120 hours and 40% if the employee works at least 400 hours.
The average benefit per employee is $2,400.00 and can be as much as $9600.00. That means potentially 10 qualified employees could yield a federal income tax credit between $24K – $96K. Additionally, WOTC credits may be carried back one year and carried forward 20 years.
Simply put, the WOTC reduces an employer’s cost of doing business and turns Human Resources into a profit center.
Property Tax Mitigation
Property Tax Mitigation Study Overview
Outside of income taxes, the single largest recurring charge for commercial property owners are Property Taxes. In most states, owners are required to pay taxes on both their real estate as well as their personal property. These charges are often an immense expense and a constant hit to the bottom line. To be ensured you are not being overcharged on your Property Taxes, an industry specialist with extensive market experience in valuation, tax, and law should be retained.
History of Program
As far back as 1796 there has been some level of property tax in the United States. By 1900, more than half of the states enacted clauses that required taxation of property. Over the past hundred years, local governments, municipalities, townships, school districts, and other bodies have enacted specific methods for the calculation of property tax in their jurisdiction. This has led to innumerable protests and legal mitigations that continue to this day.
Any Commercial Property Owner who pays over $50,000 per year in Real or Personal Property Tax is worthy of a free review to determine potential reduction opportunities.
What are the Benefits?
The immediate benefit is the reduction of taxes owed and the potential of refunds on prior taxes paid. The future benefits would similarly be a reduced tax burden going forward, producing an increased cash flow for the business.
Our experienced team of professionals in mitigation, valuation, assessments, and law will work on your case to identify any potential opportunity for refunds and/or reductions in your current property taxes. We perform all the work on your behalf until savings are captured, including partaking in hearings and filing necessary paperwork. We act as an extension of your company toward the governing property tax bodies.
A simple contingency engagement with us will get the ball rolling. We will collect your most recent property tax assessment as well as an authorization for us to work on your behalf. We then go to work for you! When we procure a savings/refund for you, our fees will simply be a percentage of what you receive as a result of our work.
The initial consultation is a simple and quick process. To schedule your consultation, please contact us.
R&D Tax Credits
R&D Tax Credit Study Overview
The Manufacturing Incentives benefit is a Federal program designed for Companies that perform Manufacturing in the U.S. This program is listed under Section 41 or the IRC (Internal Revenue Code) and continues to be amended on an annual basis as the U.S. Manufacturing landscape continues to evolve. This is an engineered based program that focuses on a company’s operations and processes in order to determine their qualification for incentives. The Manufacturing Incentives benefit provides an avenue to receive ‘tax money’ back from prior years while also reducing current taxable income on a dollar-for-dollar basis.
History of Program
The Research & Development Tax Credit was originally enacted as a Federal Tax Program in 1981 and was designed to encourage American investment in innovation. In 2004, tax regulation changes significantly expanded the credit opportunity. Today, the credit is accessible to many small and medium sized companies whose activities include design, manufacturing and process improvements..
Who and what qualifies as research and development (R&D) is much broader than most realize. Activities and costs related with developing or improving a product and/or process often qualify for R&D tax credits. Furthermore, enginnering, design, testing, and programming are now included as Qualified Research Activities (QRE).
Industries that most commonly qualify are:
Tool & Die
What are the Benefits?
The benefits of having an R&D Tax Credit Study performed would be:
Dollar for dollar credit against taxes owed or previously paid
Carry forward credit for future profitable years
Immediate increase in company cash flow
Credit average is over $25,000 per $1,000,000 in total company payroll
GMG utilizes a team of highly qualified professionals including IP attorneys with engineering backgrounds and adheres to the Comprehensive Project by Project Approach methodology as required by the IRS. By following this methodology, we qualify every applicable employee, activity, hour spent and corresponding wage paid in order to maximize the incentive for our client. We strictly adhere to the applicable sections of the code and provide first-in-class documentation to substantiate our findings.