Commercial Membrane Roof Expenses May Be Tax-Deductible

Have you put off commercial roof maintenance because of budget or cost concerns? Or upgrading your BUR roof to an EPDM, PVC or TPO membrane roof? There have been some changes in the federal tax code during the last few years which might change your point of view on this as commercial membrane roof repairs and commercial membrane roof replacement may now be tax-deductible.

Introduced in 2017 for the 2018 tax year, IRS section 179 provides tax relief for “improvement to nonresidential real property after the property that was first placed in service including roofs, heating, ventilation, and air-conditioning property, fire protection and alarm systems: and security systems”.

What does this mean for qualifying business owners?

In essence, you can deduct the full cost of a roof replacement in the year it was installed, instead of depreciating over 39 years with the 179 tax deduction. The deduction limit is now $1,000,000 instead of $500,000 from 2017. Expenses up to $1M with a phase-out threshold to Section-179-Deduction-Image$2.5M. One thing to note, If your repair cost exceeds $2.5, then you are not qualified for the full $1 million deduction.

This deduction also applies to roof maintenance on commercial buildings. Any routine maintenance, from annual inspections to minor (or major) repairs, that are done on your roof can be fully deducted in the year that it was completed. The IRS defines routine commercial roof maintenance as the following:

    • Repairs or maintenance needed to keep your commercial property in its normal condition and operating efficiently
    • Repairs or maintenance resulting from regular wear and tear
    • Repairs or maintenance resulting from wear and tear caused by your trade or business
    • Repairs or maintenance required more than once during a 10-year period or during its class life.

These new deduction changes, which started in 2018 and will continue for this tax year of 2020, can be applied to new and used equipment, vehicles, furniture, software, property additions, and, as indicated above, roofing repairs, upgrades, and roof replacement. You should consult your tax preparation professional to learn how you can take advantage of the 179 tax deduction for roofing projects. These deduction limits are subject to inflation and can change without notice, so it is important to consult with your tax professional so they can help you take advantage of this tax code.

Beyond the financial benefits delineated above, roof inspections and routine or prescribed maintenance and repairs can help extend the lifespan of your existing roof. In fact, studies have shown that proactively-maintained commercial roofs can last up to 60% longer than roofs that are maintained reactively and save money in the long run. 

If you’d like to discuss costs for a roof inspection, routine maintenance or for a replacement roof or get an estimate, please contact us.

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