The issue of roof repairs and replacements poses a long-standing dilemma for tax professionals and our clients. Generally (and in most cases, optimally), one expects that such repair or even replacement costs can be expensed in the year in which they are incurred. But the analysis required to determine what should be done is not so straightforward, especially with the recent release of the tangible property regulations by the IRS. If so, the portion of the roof extension is capitalised and, depending on the facts, possibly the entire roof system.
Typical examples of roof replacement or installation of a new roof, kitchen renovation and bathroom remodeling are some typical examples of home improvement. Now, changes to Section 179 of the IRS tax code allow a business to expense an entire new roof in the year it purchased the roof. Whether it is a roof replacement or any other home improvement task, it is necessary to keep track of all such expenditures and working with a reputable roofing contractor like ROI Construction will help ensure that you have a valid and legal paper trail of the expenses. However, if it is a million dollar roof (which is possible on very large buildings or unusual roofing systems, such as green roofs), you can deduct that entire amount.
For example, if you install a new roof over your home, the cost of the section covering your work area or home office can be deducted from your annual taxes. For accurate, up-to-date information on roof replacement tax deductions, you should consult a certified public accountant. Not only can you expense your entire roof in the year you purchase it, but you can also expense a larger portion of the cost of the roof. Building owners often spend significant amounts to replace parts of various components of the roof system.
So let's take a closer look at roof replacement and find out if you can deduct or write it off on your taxes. If your company has purchased a new roof in the past, you may have had to amortise the cost of the roof over several years, perhaps even 39 years.
