Cost segregation is powerful on its own, but it becomes a true tax-saving superpower when combined with bonus depreciation.
What is Bonus Depreciation?
Bonus depreciation is a tax incentive that allows businesses to immediately deduct a large percentage of the purchase price of eligible assets, rather than writing them off over their "useful life." For 2025, the rules may allow for a significant percentage (e.g., 80% or 100%—check current tax law) to be deducted upfront.
How They Work Together
This is the key: Bonus depreciation generally applies to assets with a useful life of 20 years or less. Your building's structure (27.5-year property) doesn't qualify. However, all the 5, 7, and 15-year assets that a cost segregation study identifies *do* qualify. A cost segregation study is the tool that unlocks bonus depreciation for a significant portion of your property's cost. It allows you to take a huge deduction in the first year, providing an immediate and substantial boost to your cash flow.