A new expensing rule may help small businesses beneficially expense roof replacements.
As a small business owner, you already know that property improvements eat up a large portion of your profits and budget every year. Now, under Roofing Tax Code 179, a new expensing rule encourages complete reroofs, instead of patches and repairs, that can save business owners money on a long-term basis.
In 2017, the Tax Cuts and Jobs Act was signed into law, and it allows nonresidential roof improvements to be fully expensed under Section 179 of the current tax code. Under this provision, business owners who qualify can write off roofing costs the same year they purchased their new roof. Prior to this act, businesses had to recover these expenses under a 39-year depreciation cycle. Now, businesses can expense up to $1 million while also increasing the phase-out threshold to $2.5 million.
Business owners should keep in mind that the new Roofing Tax Code 179 does not apply to rental properties, like condos or apartments. Currently, structures like these are under a 27.5-year depreciation cycle, and it is unlikely that Congress will expand the new expensing rule to cover these properties.
If your business has opted for small repairs and patches to extend the life of your roof, even if a new roof was needed, Roofing Tax Code 179 may allow you to expense your investment in a replacement easily and beneficially. We would be happy to provide further information about this new expensing rule and how it could positively impact your business’ finances and operations in Denver, Colorado. Contact us at Apex Restoration & Roofing today!