The National Roofing Contractors Association (NRCA) has been advocating for years for a higher expense rate and expedited turnaround time for payouts for commercial building roofs. Their work paid off on December 31, 2017, when expensing regulations for roofs was revised in the new tax law.
Now under section 179, eligible small and mid-sized companies have the option of expensing the full cost of roof improvement within the same year. This means the return is not deducted based on the years of depreciation. This is beneficial to the taxpayer, due to the fact that they will be reimbursed the full amount, without losing any money on the roofing project.
Not only has the turnaround time been reduced, but the maximum expense has also increased; giving more opportunity to businesses who have large roofing projects.
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.
Stay proactive and start budgeting for your upcoming roofing project in 2019. Here at GSM Roofing, our trusted team is ready to help answer questions and assist your company through this process. Contact us to start the conversation about your commercial roofing project.