Have you been putting off the need to replace your roof? Even though it may not be at the top of your list, businesses are strongly encouraged to assess and familiarize themselves with what Section 179 means for their operation’s expenses and to consult with their tax advisor to see how they may financially benefit.
While purchasing a new roof can seem to be a significant upfront expense, opting for a new roof sooner than later can provide financial benefits. Learn how businesses across the country are taking advantage of Section 179 by depreciating roof replacements, allowing them to save tens of thousands of dollars on their organization's taxes.
What’s Section 179?
Section 179 is an IRS tax code part of the Tax Cut and Jobs Act that allows businesses to deduct the full purchase price of qualifying equipment from their taxable income. Qualifying purchases include improvements to roofs, HVAC systems, fire protection systems, etc. This bonus depreciation is currently set at 80% but will decrease to 60% in 2024.
Why is Section 179 important to businesses?
Business owners can save a tremendous amount of money on their taxes. The tax code allows businesses to invest in the improvement of their building and benefit from these expenditures in the same tax year.
For example, a restaurant Owner/Operator has strategized to replace several locations’ roofs over the next few years. Since she knows she has this expense on the horizon, she should consider expediting the replacements to strategically reduce her tax burden.
Are roofing projects eligible for Section 179?
Yes. The IRS uses “roofs” as an example of improvements made to nonresidential real property after the date the property was first placed in service.
Why should businesses take advantage of Section 179 as soon as possible?
Beginning on January 1, 2024, the bonus depreciation will decrease from 80% to 60%. The rate will continue to decline by 20% annually through 2026.
For example, if a business is replacing a location’s roof that costs $50,000 in 2023, they could deduct $40,000 from their 2023 taxes. If that same roof were installed in 2024, only $30,000 could be deductible from their 2024 taxes.
In order to reap the maximal benefit of depreciation, businesses should consider taking action and plan for replacements while the depreciation rate is still as high as possible. RoofingSource does not intend to provide tax, legal, or accounting advice. Please consult with your tax advisor before making any decisions in regard to Section 179.
Written By
Tom Dawson
Director of Operations and Sales
tom.dawson@roofingsource.com
