The recent tax law, effective from January 1, 2018, has brought about significant alterations that commercial building owners should be aware of. These changes, especially concerning roof replacements, can have substantial financial implications. Here’s a detailed look at what these changes mean and how they can benefit building owners.
Key Changes in the Tax Law for Roof Replacements
- Depreciation Laws Overhaul: The new tax law has introduced pivotal changes to depreciation laws. One of the most notable updates is that building owners can now expense up to $1,000,000 for qualified improvements to real property within the taxable year.
- 100% Expensing of Qualified Improvements: The law now permits 100% expense for qualified real property improvements that are placed in service between September 27, 2017, and December 31, 2022.
- Inclusion of Roof Replacements: Roof replacements have now been added to the category of qualified real property improvements. This means that the entire cost of a roof replacement can be expensed in the year it’s installed.
Implications for Building Owners
The modifications to the Section 179 depreciation rules suggest that 2018 and the subsequent years are opportune times for roof replacements. With the tax reform bill categorizing roof replacement as a qualified improvement, building owners have the chance to significantly reduce their tax liability in the year the roof is replaced.
For instance, consider the following example:
- Cost of New Roof in 2017 & Prior: $400,000
- Expensed in Year Installed: $400,000 for 2018 vs. $26,667 for 2017 (based on a 15-year depreciable life)
- Tax Rate (for illustrative purposes): 30%
- Reduced Tax Liability: $120,000 for 2018 vs. $8,000 for 2017
It’s crucial to note that every tax situation is unique. Hence, it’s always advisable to consult with a tax advisor to understand the specific tax implications for your business.
Why Choose Lenox Roofing?
When it comes to roofing in Myrtle Beach, Lenox Roofing stands out as a leader in the industry. Our team of skilled Myrtle Beach roofing contractors ensures that every project is executed with precision and dedication. With years of experience in roofing Myrtle Beach South Carolina, we understand the unique challenges and requirements of the region. Whether you’re considering a new roof installation or a replacement, trust Lenox Roofing to deliver unparalleled quality and service.
The new tax law presents a favorable scenario for commercial building owners contemplating roof replacements. By understanding these changes and making informed decisions, building owners can leverage the benefits of the law to their advantage. And when it comes to quality and reliability, Lenox Roofing remains the preferred choice for many in Myrtle Beach and the surrounding areas.