A Few Things You May Not Know About The Section 179 Deduction

By Gene Marks 01-14-2022
Tag Icon

I realize you're not a tax expert. And I know that taxes are not exactly the most interesting topic in the world. But if you're a nonresidential real property owner, you should learn about the Section 179 deduction. Under Section 179 of the tax code, you can deduct up to $1,050,000 in qualifying improvements — including roofs — in the year the property is placed into service.* So, why should you take the time to learn more about Section 179? For starters, taking advantage of this deduction can help save your business money on taxes. Second – the potential savings on taxes provides a good reason to invest further in your property. So, you should speak to your financial adviser or tax preparer on how you might be able to take advantage of this deduction.

If you're a roofer, then it's just as important that you know about the deduction. Why? Because you can alert your commercial customers to speak to their financial advisers or tax preparers about treating the roof as Section 179 property to take advantage of this deduction.

So, do you already know about Section 179? Maybe you do. But here are a few things about it that you might not know.

1. You may be able to deduct the cost of your new commercial roof.

If you decide to completely replace the roof on your commercial building, you may be able to take a deduction of up to $1,050,000 for the cost of that new roof. Most businesses will qualify for this deduction, but there are certain limitations. For instance, the deduction begins to phase out after a total of $2,620,000 is spent on eligible purchases during the taxable year, and is completely phased out once you've spent $3,670,000 on eligible purchases. But, because Section 179 allows nonresidential real property owners to deduct the cost of a new roof (up to $1,050,000) as soon as it's put "into service," you can elect to take this deduction for the taxable year that the work on your new roof is complete and the roof is deemed functioning, even if you have not fully paid for the new roof yet. (Be aware, however, that your Section 179 deduction is also limited to your business' net income for the year—you can't deduct more money than you made.)

2. You may be able to write-off the cost of your old roof.

If you're replacing your existing roof, you may be able to get an additional tax benefit by writing off the cost of your existing roof. That means the amount remaining on your books representing the original cost of your existing roof, less accumulated depreciation, can be taken off your books as a loss. So, in addition to electing to take a deduction for the new roof, you may also be able to lower your taxes as a result of any loss from writing off your existing roof.

3. You may be able to deduct the cost of your roof repairs.

Even if you decide not to get a new roof and therefore are not eligible for a deduction under Section 179, you still may be able to deduct the cost of repairing your existing roof. You would have to capitalize and then depreciate any costs that improve the value of a roof. But the IRS defines routine maintenance as something that "keeps your property in a normal and efficient operating condition." So if you're spending money for things like replacing shingles or fixing a hole, you can generally take a deduction for those expenses in the year they're incurred. Please note, however, that roofing does not qualify for a bonus depreciation deduction.

I know, all this tax stuff is boring. But understanding these rules may help your company save money. That's not boring at all. In fact, it's very, very interesting.

NOTE: This blog was written by a third party writer and is designed to provide general information regarding the subject matter covered. It is not intended to serve as legal, tax, or other financial advice related to a particular situation. Because each company's legal, tax, and financial situation is different, specific advice should be tailored to the particular circumstances. For this reason, you are advised to consult with an attorney, CPA, and/or other advisor regarding your company's specific situation. GAF does not guarantee the accuracy, reliability, and completeness of the information. In no event shall GAF be held responsible or liable for errors or omissions in the content or for the results, damages or losses caused by or in connection with the use of or reliance on the content.

*This deduction only applies to property placed in service in taxable years beginning after Dec. 31, 2017. Additionally, the property must be used more than 50% in your business. An asset that is primarily for personal use but occasionally used for the business isn't eligible for a Section 179 deduction.

A past columnist for The New York Times and The Washington Post, Gene now writes weekly for The Hill, The Philadelphia Inquirer, Forbes, Entrepreneur, and The Guardian.

Gene has written 5 books on business management, specifically geared towards SMBs. His most recent is Want More Cash?: 100+ Ideas And Strategies For Increasing Your Company's Cash Flow

Gene appears often on MSNBC, Fox News, The John Batchelor Show, and SiriusXM's Wharton Business Daily talking about the financial, economic and tech issues that affect business leaders.

Gene keynotes industry conferences helping business owners and managers understand the political, economic and tech trends that will affect their companies and the actions they can take to grow and profit.

Gene owns the Marks Group PC, a successful ten-person firm that provides technology and consulting services to SMBs.

Before starting the Marks Group Gene, a CPA, spent 9 years in the entrepreneurial services arm of KPMG where he was a Senior Manager.
Don't miss another GAF RoofViews post!
Getting multiple professionals involved in a commercial roofing project offers a way to capture different perspectives—and to shine a light on some of the industry's hidden complexities—especially when it comes to challenging details like parapet walls.
Asphalt shingles are one of the most widely used roofing materials, providing an elegant yet effective look for homes while also being economical and easy to install. Here is what makes these shingles stand out from other roofing materials.
With an overall industry labor shortage, roofers are in high demand. Those contemplating a career in roofing should consider the training provided by the GAF Roofing Academy, where students can learn the skills and industrial knowledge they need to get started in the industry.
Commercial roof coatings can help extend the life and improve the aesthetics of low-slope roofs. A roof coating acts as the first line of defense against UV damage and water infiltration, and reflective roof coatings can help reduce the temperature of the roof.
GAF Community Matters is hard at work building resilient communities. As part of a $25 million commitment through 2025, GAF has teamed up with nonprofits, partnered with renowned actor Anthony Mackie, and put an increasing emphasis on sustainability and resilience in natural disaster relief efforts.
Your roof is central to your home's exterior aesthetic. Your roof style, shingle type, and color palette all work together with other architectural elements to give your home lasting curb appeal. When a beautiful home's exterior design successfully balances all of these elements, the results will bring satisfaction for years to come.
This blog contains information created by a variety of sources, including internal and third party writers. The opinions and views expressed do not necessarily represent those of GAF. The content is for informational purposes only. It is not intended to constitute financial, accounting, tax or legal advice. GAF does not guarantee the accuracy, reliability, and completeness of the information. In no event shall GAF be held responsible or liable for errors or omissions in the content or for the results, damages or losses caused by or in connection with the use of or reliance on the content.

Interested in sharing or republishing our content? We kindly ask you to adhere to our guidelines.