Is a commercial flat roof tax deductible? The short answer is yes, up to $1 million. Learn more below.
Tax Cuts and Jobs Act
Congress passed the Tax Cuts and Jobs Act (TCJA) in 2017 and made many changes to the tax code. One such change was the ability for property owners to deduct up to $1 million dollars when they install a new roof system on their commercial property. This means that in 2022, any amount under $1 million for a commercial or industrial roof project can be treated as a current expense.
Previously, building owners were limited to depreciated value deductions over a prolonged period of time. The TCJA modified section 179(a) of the Internal Revenue Code. Additionally, the TCJA allows deductions for commercial roof maintenance and repairs.
Section 179 allows taxpayers to deduct the cost of certain commercial property as an expense when the property is placed in service. The section applies to tangible personal property such as machinery and equipment purchased for use in a trade or business, and if the taxpayer chooses, qualified real property, like buildings. “Qualified real property” means “qualified improved property” and some improvements to nonresidential property such as roofs or HVAC.
Consult With Your Tax Advisor
Consult with your tax advisor before you make any business decisions regarding the tax deductibility of commercial and industrial flat roof maintenance and repair work. Just to be sure,
Jared Van Vranken is Vice President and lead estimator at Flat Roof Solutions in Malvern, PA. Jared has directed the installation, repair, recovery, and replacement of commercial flat roofs for more than a decade at Flat Roof Solutions. He guides clients in selecting the best roofing material for their needs and budget.