A major expense such as a new roofing project rarely comes at a good time for your organization. There are always places where you would prefer to spend your money — on upgrades, re-investing in employees or growing your inventory for an upcoming season. However, when you're able to plan ahead and take full advantage of tax breaks, an update of this nature may end up being a long-term benefit. Not only will you receive a new, high-quality roofing system, you'll also be eligible for up to one million dollars in benefits due to changes in the 2018 tax code. See how these shifts could aid your organization this year.
Updates to the Tax Code
While there has been a lot of talk in the news about the changes to the tax code for individuals, you may not be aware that there were also some pretty large shifts for businesses as well. Starting January 1, 2018, there were some significant changes to Section 179 of the U.S. tax code that benefited businesses. This code provides organizations with a way to immediately deduct up to one million dollars on a roofing project instead of using depreciation to spread the costs over a multi-year period. While there are some limitations, the overall code is relatively broad and can positively impact the speed at which you gain a return on your roofing investment.
The updates to the 2018 tax codes are meant to stimulate the economy overall, and commercial construction in particular. Residential roofing projects are not covered under Section 179, but it allows owners of real property to take this upfront deduction for a wide range of upgrades such as heating, ventilation, air-conditioning, fire protection, security systems, and of course, roofing. The far-reaching law effectively doubles the amount that businesses can expense from a major project to support their building's infrastructure from $500,000 to a full million dollars.
Word of Caution
While organizations with many commercial properties may immediately rejoice, it's important to note that there are some additional limitations. The phase-out threshold has been lifted from $1,000,000 to $2,500,000, but it does still apply in 2018. Property upgrades above this limitation would see their tax benefits reduced dollar-for-dollar and would return to the standard depreciation schedule. Generally, depreciation in the U.S. for commercial buildings is 39 years — a timeframe that makes it more difficult to see a meaningful return on your roofing investment. Expensing the capital roofing improvement can be a big win, even if the planned updates are less significant than a full roof replacement.
Are you ready to claim your massive deduction in 2018 and upgrade your commercial roofing at an advantageous time? Contact the licensed and bonded professionals at MG Roofing, Inc. today at 256-381-0379 today. We have been providing commercial roofing to organizations since 1976, and excel in industrial, commercial and historical roofing projects.