By Russell Cazeault
The new tax law is good news for small and mid-sized business owners in need of roof repairs.
The Tax Cuts and Jobs Act makes changes to Section 179 of the IRS tax code. Specifically, it adds improvements to non-residential roofs to the list of what’s eligible for full and immediate expensing. The new law also increases the maximum amount a taxpayer may expense from $500,000 to $1 million.
In a nutshell, Section 179 allows businesses to deduct the full cost of qualifying equipment, property or software purchased during the tax year. It’s an incentive created to encourage businesses to buy equipment and invest in themselves.
The new law is particularly helpful to small and mid-sized businesses with commercial facilities. Any improvements to their roofs, including full re-roofs of existing businesses, may now be fully expensed up to $1 million in the year the property is placed in service.
The new law also expands the definition of Section 179 qualified property to include improvements to heating, ventilation, air-conditioning, fire protection and alarm and security systems.
There is one caveat: the deduction is reduced dollar-for-dollar by the amount all Section 179 property owned or leased by a business exceeds $2.5 million (the limit was increased from about $2 million). This is called the phase-out threshold, at which point standard depreciation rules apply.
It’s important that business owners on the Cape and in Plymouth County understand these new opportunities. Upgrading a roof can offset profits, and reduce tax liabilities.
Neglecting needed repairs to a roof can adversely affect business operation, and lead to lost revenue and a decline in property value, while a well-maintained roof provides years of service, and improves the value and appearance of your property.
As an industry leader in commercial roofing, we’re very pleased with these changes to the tax code. The new rules provide sound incentives for local business owners to invest in their commercial property. But before considering a major roof project, check with your tax professional to fully understand potential tax savings.
A roofing family since 1927, Cazeault Roofing & Solar is a full service commercial roofing company that serves the Barnstable and Plymouth County regions. We also provide roofing, siding, & gutters on residential properties as well as install solar systems.
Russell Cazeault is President of Paul J. Cazeault & Sons. He can be reached at russell@cazeault.com or (508) 428-1177.
