You can deduct taxes on the cost of replacing your roof, but it all depends on the types of improvements you’ve made to your roof and how well you keep track of your expenses. If you pay for a roof replacement this year, don’t expect to write it off on your taxes this tax season. Other than a few unique cases, you can deduct a roof replacement on your 1040. For example, if you replace the roof of a rental property, you can deduct the expenses gradually over time. But if it’s your personal home, you will have to wait until you sell the home to gain any tax advantages. To learn more about what is and isn’t deductible for taxes, it’s best to consult with an accountant or tax professional.
Capital Gains
The IRS calculates your capital gains when you sell your home by subtracting your “adjusted basis” from the total sale price. The basis is the amount you originally paid while the adjustments include any property improvements which increased the value of your home, such as a new roof. For example, if you buy a home for $100,000 and sell it for $150,000, your gain is $50,000. So, if you paid $20,000 for a roof replacement before selling, the gain is only $30,000.
Depreciation
If you own a rental home, you can write off any roof repairs as a deduction. However, replacing the roof counts as home improvement, not a repair, since it adds substantial value to the property. Rather than claim a deduction, you can recover the cost by depreciating the roof’s value each year, based on the same depreciation methodology you use for the home. Typically, it takes years to write off the total cost of a roof, depending on which IRS-approved method you choose.
Casualty
The IRS defines a casualty as the damage of your property due to a sudden, unexpected incident such as a fire, lightning strike, or storm. If your home loses value because a windstorm ripped off your roof, you can claim the loss as a tax deduction. Typically, you claim the loss on your home’s value rather than the replacement cost. So, the total cost of replacing your roof is evidence of how much value the home lost. However, you can’t claim casualty losses your insurer reimburses.
Keep Clear Records of Your Expenses
When adjusting your basis, be sure to include everything you spent on the roof, both for materials and labor. You cannot, however, include the cost of your own work on the house, even if you’re a professional roofer. Keep records of all your spending as long as you still own the property. You need the paper trail to prove you’re depreciating the correct amount. By keeping track of all expenses, you can substantially reduce your taxes when you decide to sell the house.
Financing a Roof Replacement Project
When you have extensive roof damage and need a full replacement, the cost can be massive. In most cases, personal savings may not be adequate to pay the full amount upfront or out of pocket. Fortunately, there are financing options available to homeowners in Jacksonville, FL. By working with a reputable local roofer, you can get financing to take care of your roof before the damage gets worse.
Financing through a reputable contractor is perhaps the most cost-effective and convenient way to finance a new roof. Your roofer typically works with the bank or other financial institutions to help you manage the cost of the roofing project depending on your budget and the roof replacement cost. Each roofing company chooses a bank they can smoothly work with to design the right roof financing options to suit the needs of their customers.
The benefits of financing through a contractor often outweigh direct-lender financing. Generally, roofers who offer financing can give special promotions beating mainstream banks and other lenders. They can negotiate special rates from the banks and pass the benefits along to their customers.
Work with a Reputable Local Roofer!
At StormForce, we are very fortunate to have been able to assist a lot of customers throughout the Jacksonville, FL area. Every full roof replacement is supervised by an experienced Site Foreman whose primary mission is to ensure the project runs seamlessly to the satisfaction of our clients. We are also a GAF Certified Master Elite Contractor who is authorized by the GAF Corporation to provide a Lifetime Warranty on roofing installations. Contact us today to learn more about our financing options for roof replacements. Don’t forget, if you have any questions about tax deductions, contact an accountant or tax professional for more information!