Here at Unicoat Industrial Roofing, we confidently assert that we are an experienced roofing contractor. That said, we are not tax accountants or financial advisors. While the following blog is meant to provide you with important information regarding your investments into roof maintenance and replacement for your commercial building, we recommend that you call your tax advisor to learn more about IRS Section 179 and if it can help your business.
What Does it Say? Section 179 is a tax deduction that provides businesses the ability to write off all or part of the cost of qualified property and equipment in the first year that it was purchased or put into service, rather than it being depreciated over time.
Commercial Roof Maintenance and Coatings May Be Tax-Deductible
Many commercial property owners defer their roof maintenance, upgrades or replacements due to budgetary constraints and concerns about costs. However, changes implemented by the IRS under Section 179 of the federal tax code may present the opportunity to view commercial membrane roof repairs and commercial membrane roof replacement as tax-deductible.
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”.
How Does This Affect Qualified Commercial Property Owners?
Basically, the Section 179 tax deduction gives property owners the option of deducting the total cost of a roof replacement in the year it was installed, rather than depreciating it over nearly four decades. As of 2022, the deduction limit was raised to $1,080,000.
Note: If the total expenses associated with repair exceeds $2.7 million, the company is not qualified for the entire $1.08 million deduction.
This deduction may also be applied to commercial roof maintenance, including routine maintenance, scheduled annual inspections and required minor (or significant) repairs. Maintenance and repairs can be fully deducted in the year that the work is completed. According to the IRS, routine commercial roof maintenance is defined as:
- Repairs or maintenance required to maintain normal condition and operating efficiency
- Repairs or maintenance required as a result of regular wear and tear
- Repairs or maintenance needed due to wear and tear caused by unique business operations
- Repairs or maintenance required to be performed more than once during a 10-year period.
The deduction may be applied to a wide variety of industrial equipment and infrastructure, including vehicles, new and used equipment and property additions – as well as roofing repairs, upgrades, and roof replacement. Companies should discuss their eligibility with their corporate tax professional to understand how to take advantage of the 179 tax deduction for commercial roofing projects. Like anything, these deduction limits and terms can change without notice, so it is important to consult with an expert.
More Than a Financial Benefit
Aside from the tax benefits and financial implications for your annual filing, roof inspections and routine maintenance/repairs can significantly extend the lifespan of your existing commercial roof. In fact, proactively caring for your roof can result in a system that lasts 60% longer than roofing systems that are neglected and only repaired when there is an issue.
Roof coatings can add decades of usefulness to your commercial roof, at a fraction of the cost of installing a new roof. If your roof is structurally sound but needs repair, call Unicoat Industrial Roofing to learn more about roof coating solutions – then call your tax accountant to learn more about deducting the expense!
Unicoat Industrial Roofing provides expert commercial roofing services to companies across the country, and are considered among the top professionals in the roof coatings space. Call today for a roof assessment and quote.