Your Business May Be Overlooking Tax Savings in Work It’s Already Doing

You buy a building. You renovate a facility. Your engineering team spends months trying to solve a production problem.

Each of those decisions has an obvious business purpose. But have you looked closely at the tax opportunities connected to that work?

That was the focus of my recent Ask the CFO conversation with Ben Jones of Capstan Tax Strategies. We explored three areas that business owners may overlook: research and development tax credits, cost segregation, and energy-efficient commercial building deductions.

I came into this conversation with experience in R&D credits and plenty of questions about the other two. What stood out was how much depends on getting beyond the surface of a project and understanding what actually happened.

Your team may be doing R&D without calling it that

When people hear “research and development,” they often picture laboratories, patents, and scientists in white coats. Ben described a much more familiar setting: a machine shop working through a technical problem.

A company may be developing a production process, testing a design, or experimenting with ways to improve a product. The people doing that work may simply think of it as solving the customer’s problem.

During our discussion, Doug Doering shared that his former construction employer initially had the same reaction: How could a construction company have R&D? A closer look at its engineering activities revealed opportunities that, he said, ultimately resulted in substantial credits.

That doesn’t mean every improvement or engineering project qualifies. It does mean the label your business puts on the work may keep you from asking the right questions.

Ben also emphasized that a project doesn’t have to succeed to merit evaluation. An unsuccessful effort may still involve qualifying research activities. If your review only captures completed projects, you may be missing part of the story.

A questionnaire can only tell you so much

I asked Ben how a specialist’s approach differs from the annual process many companies already follow with their accounting firm.

His answer centered on depth.

A questionnaire may identify a project. A conversation with the engineer who worked on it can explain the uncertainty, the alternatives considered, what was tested, and who participated.

That detail matters in both directions. It can uncover qualifying activities that were overlooked, and it can prevent a company from including work that shouldn’t qualify.

Ben described Capstan’s approach as combining engineers who evaluate the activities with tax professionals who review how the findings fit the applicable requirements. The client’s CPA remains part of the process, connecting the study to the company’s broader tax position.

For business owners, I would start with a simple question: When was the last time someone had a substantive conversation with the people actually doing the work?

Cost segregation changes the timing of depreciation

Cost segregation was the area where I wanted Ben to walk us through the basics.

His explanation: a building contains different assets, and those assets do not necessarily belong on the same depreciation schedule. A study evaluates the components and identifies which may qualify for shorter recovery periods.

The business value is the timing. As Ben explained, cost segregation accelerates depreciation; it does not simply create additional building cost to deduct.

From a CFO’s perspective, that distinction matters. Reducing taxes sooner can leave more cash available for operations, investment, or other business priorities. Whether acceleration makes sense depends on the company’s ability to use the deductions and its longer-term plans.

Bonus depreciation can make that timing more significant. Current federal law restored 100% bonus depreciation for eligible property acquired and placed in service after January 19, 2025, subject to the applicable rules. A study performed today does not automatically make an older property eligible for that treatment. IRS guidance

The opportunity may involve an older purchase or a renovation

One of Ben’s most useful points was that owners shouldn’t limit the conversation to buildings purchased this year.

He described reviewing properties acquired years earlier to determine whether a look-back cost segregation study still made financial sense. The answer depends on the property, its basis, and depreciation already claimed.

We also discussed improvements to leased space. I asked about a manufacturer renting a facility and spending significantly to make it usable for production.

Ben explained that renovations can warrant evaluation, including in leased facilities. The lease terms, who paid for the improvements, and the nature of the work matter.

The practical lesson is to bring the actual project to your advisors. “We lease our space” or “we bought that building several years ago” may not answer the question on its own.

Energy-efficient building projects deserve a separate review

Our third area was Section 179D, the energy-efficient commercial buildings deduction.

Ben discussed how qualifying building projects can create an opportunity beyond depreciation. Relevant systems include interior lighting, heating and cooling, ventilation and hot water, and the building envelope.

The deduction depends on requirements such as documented energy savings and certification. Its value can also be affected by prevailing wage and apprenticeship requirements. A new building or a large renovation does not qualify automatically. IRS eligibility overview

There is also a current timing restriction readers need to know: Section 179D is unavailable for property whose construction begins after June 30, 2026. Projects begun on or before that date may still warrant review, subject to the other requirements. IRS deadline guidance

Ben also highlighted an opportunity for designers. Certain architects, engineers, and other qualifying designers working on buildings owned by specified tax-exempt entities may receive an allocation of the deduction. That requires appropriate eligibility and written allocation documentation. IRS designer requirements

A deduction and a credit are different numbers

We clarified this during the conversation, and it deserves emphasis: a deduction reduces taxable income; a credit reduces tax liability.

R&D was the tax credit we discussed. Cost segregation affects depreciation deductions, and Section 179D is a deduction.

For a simplified illustration, a $100,000 deduction at an applicable 30% tax rate would reduce taxes by $30,000 if fully usable. It would not create $100,000 in cash savings.

That is why I want business owners to ask about the estimated cash impact, the timing, and the fees—not just the size of a deduction.

Questions to bring to your next planning conversation

If any part of this sounds familiar, start with these questions:

1. What technical problems have we worked through? Include experiments and unsuccessful projects when asking a specialist what warrants review.
2. What property have we purchased or improved? Consider prior acquisitions as well as recent renovations.
3. How thoroughly are our activities documented? Ask whether the review reaches the employees who performed the work.
4. Do any building projects warrant a 179D review? Confirm construction timing and the other eligibility requirements.
5. What is the net financial benefit? Evaluate fees, usable tax savings, timing, and how the strategy fits the broader business plan.

Ben described fixed fees for cost segregation engagements and percentage-based fees with caps for certain standalone studies. The scope and written proposal should make clear what is included.

For me, the value of this conversation was the reminder that tax planning needs a clear picture of operations. The work happening on the shop floor, in the engineering department, and inside a building project may tell a story the financial statements alone cannot.

Watch or listen to Ask the CFO

Watch the full conversation with Ben Jones for a deeper discussion of these opportunities and the questions business owners should ask.

Ask the CFO continues as a live, interactive conversation where you can bring questions and participate. You can also follow the podcast and listen on your own time:

• Spotify
• Apple Podcasts

To connect with Ben, visit Capstan Tax Strategies or email bjones@capstantax.com.