NEW TAX BENEFITS FOR COMMERCIAL ROOFING

JUST RECENTLY PASSED TAX REFORM BILL QUALIFIES PROPERTY OWNERS FOR A $1 MILLION DEDUCTION FOR COMMERCIAL ROOF EXPENSES. THERE IS QUITE A BIT OF INFORMATION WITH REGARDS TO THIS NEW BILL; WE’VE TAKEN THE LIBERTY OF PROVIDING SOME RELEVANT INFORMATION BELOW:

“The Sec. 179 expensing provision (deduction) is intended to primarily help small businesses purchase needed equipment and write-off the full amount on their taxes for the current year. Qualifying 179 property generally includes business equipment, computers and certain vehicles, and virtually all construction equipment and machinery purchases are allowed. Non-residential roofs are also now included.

The new limit on the total amount of Sec. 179 property a business can purchase each year before a phase-out begins is $2.5 million (up from $2 million), and the annual limit for the deduction itself has been raised to $1 million (up from $500,000). Also, the $1 million annual deduction and $2.5 million maximum business investment limits are now permanent and indexed for inflation each year starting in 2019.”

A provision that does provide a benefit to a business owner’s tax situation is the increase of the Section 179 deduction. This deduction allows a business owner to fully expense the cost of a capital asset in the year it was placed in service. The previous deduction provided for a $500,000 limit on expensing. The new limit was raised to $1 million and the phase-out was also increased from $2 million to $2.5 million.

In December 2017, Congress approved the Tax Cuts and Jobs Act (H.R. 1) of 2017, the most sweeping tax reform legislation in more than 30 years. NRCA was actively involved at each stage of the legislative process and is pleased the final bill recognizes the roofing industry’s highest priorities. The positive results demonstrate the value of NRCA’s active engagement in the policymaking process in Washington, D.C., and at the grassroots level on behalf of its members.

Section 179

Section 179 allows taxpayers to immediately expense the cost of qualifying property rather than recovering such costs over multiple years through depreciation. The Tax Cuts and Jobs Act significantly expands the expensing limits under Section 179, with the maximum amount a business may expense now set at $1 million and the phase-out threshold increasing to $2.5 million. These new limits are effective for qualifying property placed in service in taxable years beginning after Dec. 31, 2017, and the amounts will be indexed for inflation starting in 2019.