2021 Tax Deductions for Commercial Roof Repairs Can Enhance Cash Flow
With the 2021 tax filing season underway, now is a good time to remind commercial building owners of their ability to achieve tax savings for improvements they have made to their buildings—including their commercial roofs.
Section 179 Write-offs of Commercial Roof Improvements
Section 179 of the U.S. tax code allows building owners to deduct the cost of certain property as an expense when the property is placed in service. The deduction pertains to tangible personal property, such as machinery used by a business and qualified real property.
Under the Tax Cuts and Jobs Act (TCJA), the definition of qualified real property was amended to mean improvements made to nonresidential property, including commercial roofs as well as HVAC property, fire protection and security systems. What’s more, the TCJA doubled the maximum Section 179 expense deduction, from $500,000 to $1 million, for work completed after 2017 and in place before January 1, 2023. One note: If your repair costs exceed $2.5 million, you are qualified for the full deduction.
The bottom line is that commercial building owners who have replaced or upgraded their roofing systems can deduct up to 100% of the cost from their taxes in the year the roof work was completed. For example, say you installed a single-ply roofing system, such as EDPM, PVC or TPO, in place of your built-up roof. Or, you may have made repairs or improvements to waterproofing or had annual inspections. In the past, you would have had to depreciate improvements to your building over 39 years.
The IRS defines routine commercial roof maintenance as:
- Repairs or maintenance resulting from regular wear and tear
- Repairs or maintenance needed to keep your commercial property operating efficiently
- Repairs and maintenance resulting from wear and tear caused by your business or trade
Buildings that qualify for the 179 tax deduction include industrial/warehouse, apartment, retail and office. Changes to the tax law can go a long way in alleviating the costs associated with roof repairs to these properties.
Take Full Advantage of Tax Deductions for Your Commercial Roof
If you held off on making commercial roof repairs in 2020, plan to make them in 2021 to benefit from bonus depreciation. If you are considering a full replacement, now is the time to make an appointment with a qualified Cleveland, Ohio commercial roofing contractor.
At Roberts Roofing, we will continue to monitor any new tax proposals that could potentially affect the deductibility of commercial roofing repairs or replacements. Please remember that this information is general tax information. You should always discuss your particular building improvement costs with your tax advisor.
Roberts Roofing Company has been a leading provider of innovative commercial and industrial roofing solutions in Cleveland, Ohio since 1981. We provide commercial repair, replacement and maintenance to serve companies of all sizes in Ohio and the surrounding region, offering a combination of technical expertise, custom solutions and quality workmanship for every project.
To find out more about selecting a commercial and industrial roofing contractor in Cleveland, Ohio, simply fill out the form on this page and a member of our team will be in touch. Or, you may call us at (440) 946-2233.