Cost Segregation Studies
Engineering-based cost segregation studies permit commercial real estate owners to reclassify real property for depreciation purposes as more rapidly depreciating personal property.
An average cost segregation study offers approximately $150K in additional depreciation per $1M in purchase or construction cost over the normal 39-year straight line method.
The Commercial Property benefit is a Federal program designed for business owners who own commercial properties, or have performed significant leasehold improvements.
This program traces it’s roots as far back as the Tax Reform of 1986, but went through significant changes in 2004 making it more accessible for small and midsize property owners to take advantage of.
The most recent changes appeared as late of February 2009 in the American Recovery and Reinvestment Act. This is an engineering based program that focuses on the components of the building.
90% of all commercial properties qualify for this program. Commercial Property Benefit provides an opportunity to significantly reduce federal taxes and improve cash flow.
Our typical client is any commercial property owner who since 1987 has purchased or built within the last 20 years, with $500K or more in cost or, has renovations/improvements within the last 20 years of $250K or more in cost AND, has paid federal taxes within the last 3 years, or plans to in current year.
Typical industries include Hotels, Restaurants, Apartment/Nursing Complexes, Office/Retainer Complexes, Shopping Malls, Manufacturing Facilities, Funeral Homes, Dealerships, Golf Courses, Grocery Stores and Medical Facilities.
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Investment Tax Credit (ITC) – When this credit was repealed in 1986, most assumed cost segregation studies provided no further benefit under the new tax law.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 succeeded 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.
“Cost Segregation Studies are a lucrative tax strategy that should be considered in almost every real estate purchase.” -U.S. Treasury
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.
Property Tax Audits
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.
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.
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.
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.
Research & Development Tax Credits
The R&D Tax Credit is a federal program listed under Section 41 of the IRC and is designed for companies performing manufacturing in the U.S. The R&D Tax Credit provides an avenue to receive “tax money” back from prior years while also reducing current taxable income on a dollar-for-dollar basis.
An average R&D Tax Credit study offers approximately $20K to $40K per year for every $1M in total company payroll. Companies may be eligible for three years, plus the current year.
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: Manufacturing, Fabrication, Engineering, Software Developers, Chemical, Tool & Die. Machine Shops, Plastics Manufacturers, Pharmaceutical, Biotechnology, Food Sciences/Manufacturers.
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
We utilize 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.
Work Opportunity Tax Credits
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.
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.
WOTC is a federal tax credit created by the Small Business Job Protection Act of 1996 and the Welfare-to-Work Tax Credit of 1996.
This credit is available to employers who hire and retain from target groups.
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.
Historically the steps necessary to qualify for the WOTC have been time consuming and burdensome.
We have made substantial investments in a proprietary technology process that relieves the employer of 90% of this burden by automating most of the steps involved in prescreening and certifying candidates before hiring as well as streamlining the submission of required documentation to State and Federal agencies.
Credit Card Processing Audits
Our credit card merchant audit helps organizations reduce payment processing expenses.
Our proprietary tools audit and analyze credit card processing and provide transparency to merchant fees and statements. Fees are based only on a percentage of savings.
Seeds of Saving’s expense reduction service department is made up of payment industry experts whose mission is to provide transparency and expense reduction solutions to merchants who process credit card transactions.
We are not a payment processor or merchant service provider.
We partner and consult with merchants to achieve savings with their existing provider, eliminating the need for any changes or configuration to your existing business environment.
Potential businesses must annually process in excess of $300,000 in card payment volume.
From auditing and analysis, to regular monitoring and reporting, to an ongoing commitment to processing optimization, We have the experience and expertise to be your ally in the payment industry, your advocate and advisor on best practices, and your partner in cost savings.
We have seen the highest success rate for merchants that process credit card transactions where the card is not physically present.
This is referred to as a Card Not Present (CNP) environment, and includes B2B and eCommerce companies. Companies processing card payments between $1M and $20M on an annual basis typically have the largest potential savings opportunity.
For card present locations, where the credit card is physically swiped at a terminal device, there may still be significant savings.
As such, those types of merchants shouldn’t be overlooked or immediately disqualified.
The Problem
The payment industry, and in particular, credit card processing, is complex.
Merchants are faced with confusing statements, hundreds of various payment processing fees - including costly layers of discount rates, transaction fees and surcharges - in addition to the numerous processing options offered by merchant service providers, payment gateways, and other payment processing entities.
Without an unbiased insight, a merchant can easily fall into the trap of unfair pricing and pay large fees to accept credit card payments.
Who Should a Merchant Trust?
When evaluating merchant processing services, a merchant understands their own business requirements for card acceptance, but often have to rely on a sales representative selling merchant services to provide honest information on merchant service plan types and pricing options.
Competition for your business is fierce and most sales representatives are paid on commission for the fees generated by your processing.
This has led to deceptive sales tactics in an industry known for its complexity and negative image.
Merchants asked to reveal their processing rate often tell us about their ‘qualified’ rate or an effective rate not inclusive of all provider fees.
This misunderstanding is far too common for an expense that has significant impact on the operating margin of a business. The payment industry is complex. We can help.
Expense Reduction Solution
Our two-phase approach to expense reduction is unparalleled in the payment industry.
We correct the processing plan to reflect the most competitive plan type and rate, using formulated, specific asks of the existing provider.
Our team then works with the client to further reduce the non-negotiable fees through processing optimization – where we help qualify payment transactions at lower interchange rates by passing through additional processing data.
Phase I We ‘right-size’ the account plan, placing the merchant on the correct plan type with the most competitive plan rate.
Savings are immediately realized moving forward.
Phase II We implement ‘processing optimization’ where we help the merchant correct future transactions to avoid downgrades and satisfy Level 2/3 processing requirements.
Seeds of Saving has tools to audit and analyze credit card processing, and we are uniquely positioned to secure the lowest possible card processing rate, ensure accurate billing, and help merchants reduce their overall payment processing expenses.
We are ready to make a difference to your bottom line by delivering maximum transparency and measurable results.
Our experience and expertise in the payments industry, along with our proprietary auditing tools, will deliver unparalleled expense reduction results.
A Simple Approach With Effective Results
We start by auditing a few recent merchant service provider statements and deliver an easy-to-understand analysis – at no obligation and with no cost to you.
After reviewing the results of our payment processing audit, you decide if you’d like to engage our services.
We would then go to work on your behalf, with your existing merchant service provider, to reduce the payment processing fees tied to credit card transactions.
Our success is based on measurable results, and our fees are only a percentage of your savings.
Workers’ Compensation Insurance Premium Audits
70% of all employers have overpaid on their Workers’ Compensation premium costs.
Our team performs a review to determine if there is a significant opportunity for a lower rated classification as they are typically determined by insurance company underwriters.
Our Work Comp Audit identifies and recovers workers’ compensation premium overcharges by reviewing the past five to seven years of classifications, experience rating calculations and premium audit calculations.
Some of our top qualifying industries consist of:
Aircraft
Amusement Park & Ski Areas
Assisted Living
Automobile Dealerships
Beverage Dealers
Wholesale
Bottlers
Box Mfg.
Bldg. Operators
Cable Installation
Casinos, Carpentry
Clothing Mfg.
Contractors
Food Processing
Foundry
Forklift Operations
Garbage Collection
Grocery Stores
Home Builders
Home Health Care
Hospitals
Labor Services (temp help)
Lumber Yards
Machinery Dealers
Meat Processors
Mining Operations
Municipalities
Lurching Homes
Oil & Gas Exploration
Plastics Mfg.
Railroad Operations
Restaurants
Sand & Gravel
Scaffolding
Scrap Dealers
Sheet Metal
Trucking
Warehousing
Wrecking & Demolition.
Ideally we are looking for companies that have an average workers compensation premium of $50K or above, also companies that have operations in more than one state increase the opportunity of recovery a refund substantially.
The industries with the higher risk of employee injury usually see the most savings including construction, manufacturing, temporary employment agencies, health care, etc.
We do not conduct reviews in the monopolistic states (WA, WY, ND & OH).
Over the years, we've had our best results in states located along the east coast from Maine to Florida as well as the midwest including Illinois, Wisconsin, Tennessee, Kansas, Indiana and Colorado.
We've had success in California (not as much as the other states mentioned above), however California premiums are the highest in the country.
Average total recovery is 10-15% of a company's one year average annual premium.
For example, if a company has been paying on an average $100,000 per year in workers' comp premiums, the average total recovery would be $10,000-$15,000.
An overpayment can go back 5-7 years, however depending on the class codes and some restrictions some recoveries will only go back 3 years.
Business Financing
Banking and financing qualifications should never be a mystery when applying for loans or lines of credit.
To combat blind applications we pair you with advising teams that are on the pulse of lending requirements to ensure your financing success.
We will make sure you understand the proper guidelines to meet pre-qualifications and get funded.
Corporate Loan Service
For those that are looking for corporate real estate or business purpose financing, we have a consortium of select companies and individuals with expertise in a variety of funding environments.
Each member of this group of professionals has been carefully selected for their expertise, knowledge and contacts with their specific niche markets.
This elite group works as a team to find solutions for those in need of financing.
We consult on a confidential basis and utilize each other's resources to insure the best possible chance of success.
Business Financing
The three major factors lenders look at are cash flow, credit and collateral.
When businesses can demonstrate all three they stand a good chance of getting the funding they need.
However, all too often something is missing and usually it's a lack of collateral since many businesses typically do not own buildings, valuable machinery or inventory that could easily be liquidated.
Many times those businesses would be denied financing, however with Stryde, very frequently we will be able to accomplish financing opportunities and options for them.
Real Estate Financing
With interest rates at or near record lows there is incredible incentive to take advantage of those rates, Seeds of Saving has lenders that are more than interested in participating in both facilitating and servicing the needs of those borrowers desirous of taking advantage of today's superior rates.
Lending Offered
Conventional Commercial Loans (all forms)
Small Balance Commercial Loans
Bridge Loans (Especially large balance)
Securities Based Financing (Loans against stocks, bonds, mutual funds etc. As well as some IRA’s/401K’s)
Apartment Buildings
Hospitality Industry (Hotel, Motel, Event Centers)
Office Buildings
Medical, Medical, Medical! (Buildings, Re-Fi’s, Purchases, Working Capital as part of a refinance or purchase etc.)
Church Loans
Hard Money
Deposit Based Financing (ACH Debit)
Credit Card Lines of Credit
Residential (Alternative Financing i.e. Foreign)
Investors (High Number of Properties, Stated Income/Stated Asset
Blanket Residential (5 properties minimum, no max)
All SBA Categories
Construction Loans
Large Balance Mezzanine, Bridge Equity (15MM and above)
Lending From Hedge Funds (10MM and above)
AR (Based on Accounts Receivables)
Equipment Purchasing
Franchise Financing
Farm/AG Financing
USDA
Retirement Strategy For Business Owners
We represent commercial lenders willing to lend clients $1M or more on an “interest only” basis.
These funds are then deposited into an Indexed cash value account in a life insurance policy, for the owner’s benefit, free from market risk, growing tax deferred.
At retirement, the owner can receive lifetime proceeds “tax free.”
At the owner’s death, the loan is repaid and any remaining funds are distributed to the owner’s beneficiaries, tax free.
Here at Seeds of Saving, we work with many businesses to facilitate individualized, personalized and proprietary retirement programs.
One of the more powerful approaches we use is a front loaded retirement program, called the SRP.
While there are many nuances to the methodologies behind the working parts of this structure, the SRP is simply a tool through which a business owner may have the ability to drastically advance their wealth accumulation relative to their retirement planning efforts in a highly tax advantaged manner.
This methodology, when applicable, gives business owners the opportunity to take a tax deduction relative to their participation, grow their wealth tax deferred and take distributions out of this retirement planning medium tax free.
Additionally, it jump starts their retirement by advancing massive amounts of capital in their program for them, with the goal of realizing superior gains as a result of having more money working for them. This lends itself to having the ability to generate a much larger nest egg than through other approaches that may then be distributed on a tax free basis.
Phase 1: Commercial Loan
Your company enters into a financing arrangement with Global One Financial Inc. offered through Seeds of Saving. This loan is generally paid on a simple interest-only basis, will incorporate a UCC-1 filing if required, and typically has a 10 year term that may be renewed for longer periods.
Key Components
Generally, no personal guarantee is required for the loan.
Commercial lending structure minimizes early term-out risk possibilities that can occur with Federal and state chartered banks under Evergreen rules.
Plan Administration through the SRP program offers to help advisors of both the company and to the participants in booking the program on corporate and personal tax returns for the life of the program.
Interest-only option provides for consistent, persistent funding options.
Phase 2: Benefit Transfer
Your company enters into a financial agreement with the participant.
This agreement can be designed so that the participant recognized limited or no income upon receipt of the proceeds.
Generally, taxes are paid when the program ends and distributions begin, which the participant can anticipate and control.
Key Components
The SRP program is NOT a tax strategy. It can be a tax-efficient way to move money from the company to the participant. Check with your tax advisor. *
Based on the company structure, it is possible for the money to be moved without taxation pursuant to different sections of the Internal Revenue Code (IRC).*
The program is selective and need NOT include all employees.
Phase 3: Product
Funds are placed in select insurance policies and/or annuity contracts with the participant, trust or another entity as the owner.
The insurance policies and/or annuity contracts are held as collateral for the loan in Phase 1.
Key Components
Specifically selected life and annuity contracts are utilized.
The insurance contract provides principal protection.
All loan proceeds are placed with highly rated insurance carriers and, assuming loan program completion, there is no appreciable risk of principal loss.