Section 179 – Commercial Building
The US Government has created an incentive for businesses to grow- Section 179.
Businesses can now deduct the full purchase price of material and services during the current year. Section 179 encompasses any upgrades, improvements, materials, and property purchased in the current calendar year.
How do you use Section 179 in Commercial Roofing?When you restore or replace a commercial roof, you want to calculate your energy cost reduction. Roofs can provide energy savings a number of ways. Insulation, leaks, and solar reflectance all contribute in some way to the energy efficiency of your building. Let’s look at an example to see how you could calculate your deduction.
$7.00 x 12% (0.12) = $0.84
$200,000/$7 = 28,571 sq. ft.
$0.84 x 28,571 sq. ft. = $23,999.64 tax credit
$200,000 - $23,999.64 = $176,000.36 (New cost after the tax credit).
Should I Finance?
You could collect your tax credit, and finance your project. If you overpay on your taxes, you'll receive part of the credit in the form of a check. You've now made money restoring your property, and will save on energy costs once your project is complete.
We'd defer to your tax professional when weighing your finance options, but are more than happy to help however we can.