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With tax season around the corner, companies are crunching the numbers to get their finances in order. The 2018 tax year, however, will be kinder than usual to small businesses through additions to the Section 179 tax deduction. Here’s why this tax write-off is an opportunity to invest in what your growing business needs—even if it’s as fundamental as a roof replacement.

Why Your Business Should Capitalize on the Section 179 Tax Deduction

It Allows You to Deduct the Full Cost in the Year Completed

Previously, businesses could only recover the costs of new equipment through depreciation over a 39-year period. Now, under the new provisions to Section 179, you can write off the whole expense (up to $1 million) at once during the tax year that it was purchased. This deduction covers business supplies, upgrades, new property bought, and improvements to existing non-residential buildings—like a roof replacement. The main requirements are that the equipment must be new or “new to you,” and it must have a purpose in your business more than 50% of the time to qualify.

It’s Made for Small Businesses

Section 179 exists as an incentive for businesses to invest in themselves, and in turn, drive the economy by supporting other companies with their investments. The Tax Cuts and Jobs Act expands the expensing limits from $500,000 to $1 million to expand the opportunity for a business’s growth. 

However, if you spend more than $2.5 million on equipment during the year, the amount you can deduct decreases per dollar over that threshold. So, if you have $3 million in expenses, you’ll only be able to write off $500,000, and once you hit $3.5 million, the deduction goes away completely. This spending cap caters to small businesses who could benefit from the deduction, and whose expenses will likely stay within this $3.5 million range needed to qualify at all. 

“Improvements” Can Mean an Entire Roof Replacement

roof replacement2018 is the first year that Section 179 covers “improvements to nonresidential real property placed in service after the date such property was first placed in service: roofs; heating, ventilation, and air-conditioning property; fire protection and alarm systems; and security systems.” In other words, if your business has damage that needs repair, you don’t have to put off that roof replacement any longer.

For you to expense a commercial roof with this tax deduction, however, it is important to remember that the roof must be fully installed for the expense to apply. So, if you get your roof installed in January 2019, even if you bought it in 2018, the cost will get written off in the following tax season for the 2019 year. Check with your tax advisor to see if this deduction for roof replacement applies to your business.

 

When thinking forward to tax season, businesses around the country are looking to capitalize on this tax benefit. If a roof replacement is in order for your company, the team at ChemTech Roof & Insulation Systems Inc can install flat roofing quickly and efficiently. Their highly trained staff prides itself on the highest-quality workmanship, going above and beyond for their customers in the Triad area since 1981. For more information about how this Winston-Salem, NC, roofing company can help you invest in your business through this beneficial tax deduction, call them today at (336) 767-4500 to schedule an estimate or visit them online for more information.

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