Installing a new roof is something that improves the quality of your home, so it's considered a home improvement. Unfortunately, you can't deduct the cost of a new roof from your annual taxes. Instead, you'll need a depreciation program, which refers to dividing the cost over the life of the upgrade. Then, you can benefit from tax deduction benefits on current year's expenses.
The topic of roof repairs and replacement presents a long-standing dilemma for tax professionals and our customers. In general (and most often optimally), it is expected that such repair, or even replacement, costs can be spent in the year in which they are incurred. But the analysis needed to determine what needs to be done isn't that simple, especially with the recent issuance of the Tangible Property Regulations by the IRS. Commercial building owners who have replaced or improved their roofing systems can deduct up to 100% of the cost of their taxes in the year the roof work was completed.
For example, if you install a new roof over your home, the cost of roofing the section that covers your work area or home office can be deducted from your annual taxes. However, you should ensure that the roofing material used in your roof is certified metal or asphalt with pigmented coatings or cooling granules. Tax law changes, which allow homeowners to spend a new commercial roof in a single year, could make installing a new commercial roof less of a financial burden for businesses. Replacing the roof of your commercial building is a significant expense for your business and, thanks to the new amendments to Section 179, the cost of a new roof doesn't have to paralyze the expansion of your business.
Now, changes to Section 179 of the IRS tax code allow a company to spend a completely new roof in the year it purchased the roof. If your company has purchased a new roof in the past, you may have had to cancel the cost of the roof for several years, perhaps even 39 years. Not only can you spend your entire roof in the year you buy it, but you can also spend more than the cost of the roof. If so, the extension part of the roof is capitalized and, according to the facts, possibly the entire roof system.
