Use Section 179 to Deduct Your Commercial Roof Replacement Next Year
Tax season is here, and while this can be a stressful time of year for everyone, that goes double (or more) for business owners. Managing the expenses, profits, and taxes for a business can be a major headache, especially since there’s so much to account for. But there’s some good news: certain improvements to your commercial building may be eligible for a tax deduction under Section 179, including a commercial roof replacement.
If you completed a roof replacement in the last year, it may be too late by now to deduct it from your 2024 taxes. However, if your commercial roof is nearing the end of its service life, now is the time to schedule a professional roof replacement that you can likely use for a Section 179 tax deduction for the next tax season! Here’s what you should know about Section 179.
What Is Section 179?
Before we talk about roofing, we should first take a look at Section 179 in general. Section 179 refers to a specific tax deduction created by the IRS applying to tax years beginning after 2017. Under Section 179, taxpayers can deduct the cost of certain property as a business expense when this property is first put into use.
According to the IRS, the deduction “applies to tangible personal property such as machinery and equipment purchased for use in a trade or business, and if the taxpayer elects, qualified real property.”
What Does Section 179 Have to Do with Roofing?
Okay, so what does all this have to do with your commercial roof? As it turns out, the Tax Cuts and Jobs Act later amended the definition of qualified real property, specifying that this includes certain improvements to nonresidential real property, such as heating and HVAC systems, ventilation, fire protection, and, crucially, roofing!
Under the current tax laws, Section 179 allows businesses to deduct the full cost of qualifying property, including commercial roofing improvements, in the year they are placed in service. This can include roof repairs, waterproofing, or complete roof replacements for non-residential buildings. In other words, certain investments in your roof may be eligible to be used as a tax deduction in the first year where that roof was put into service.
Section 179 and Planning Your Roof Replacement
What all this means is that Section 179 can be an excellent way to reduce the real expense of completing a commercial roof replacement for your building. A full commercial roof replacement is one of the most significant business expenses you’ll ever face, though the long-term investment is well worth it to protect your commercial property. Through Section 179, you can potentially save money on your roof replacement and reduce the overall financial burden on your business.
How Can I Take Advantage of Section 179?
If you’d like to take full advantage of Section 179 to reduce the overall cost of a commercial roof replacement, we have a few recommendations.
Work with a Certified Tax Professional or Accountant
While our hope with this blog post is to point business owners toward a potential major tax advantage, it’s important to work with someone who can make qualified recommendations for your business.
For example, Section 179 provides up to $1,220,000 in deductions for the cost of a new roof, but this benefit phases out depending on how much your business spends on eligible purchases. The bonus depreciation rate will be phased out by 2027. A financial professional will be able to review your expenses and determine if this year is the best time to take the deduction. (Though, as roofing professionals, we strongly advise against delaying a roof replacement if you need it.)
As another benefit: a tax professional or accountant may be able to help find a way to deduct commercial roof repairs from your taxes. Unfortunately, commercial roof repairs aren’t eligible for the Section 179 deduction, but a financial professional may have other options for you.
Work with an Experienced Commercial Roofing Company
A new commercial roof is, first and foremost, a business investment. That means it’s especially important to ensure you’re getting the best quality for your money.
At Dolan Roofing & Construction, we’re highly experienced in planning and building quality commercial roofs that can stand up to the unique climate we have here in Texas. We’ll work closely with you to determine the best material and roofing design for your needs and your budget.
We’ll also communicate with you throughout the process, so you can more easily keep track of the work being done on your roof—and the overall expense that you’ll later be able to deduct come next tax season.
Contact Dolan Roofing for Your Section 179 Roof Replacement!
A major part of being a good business owner is being informed about and taking advantage of the financial incentives available to you. We’re spreading the word about Section 179 as it can be an excellent way to reduce the cost of making necessary improvements to your San Antonio business, thus freeing up more cash to continue pushing your business forward.
If your commercial roof is nearing the end of its lifespan, contact us today to start planning your roof replacement!
