One of the most important features of your home is the roof. It keeps you safe and warm from bad weather, protects your belongings, and helps maintain your home’s structural integrity. But here’s the thing: roofs don’t last forever. Most roofs last 15–25 years before they need to be replaced. While you’ve got time, it’s best to start preparing for it sooner rather than later, as roof overhauls are expensive. Roof replacements can get pricey quickly due to labor costs, material pricing, roof complexity, accessibility, permits, and more.
Never fear! Top Choice Roofing & Construction is here to share some good news. You may qualify for an IRS roof replacement deduction. If your roof meets the criteria for a capital improvement, you may not be required to pay taxes on it. Allow us to help you determine if your new roof is tax deductible.
Before getting into the big question, “Can you write off a new roof on your taxes,” let’s talk about what it means for something to be a tax deduction. The Internal Revenue Service (IRS) defines tax deductions as “an amount you subtract from your income when you file so you don’t pay tax on it.” By doing so, you’re lowering your income, which reduces the amount you must pay in taxes and may increase your return. To qualify, you must provide expense documentation, complete a Form 1040, and may be required to fill out extra forms.
As a homeowner, you can access certain tax benefits that will help offset the costs of owning your home. You may be able to deduct state and local real estate taxes within a $10,000 limit and a mortgage interest rate. To deduct real estate taxes imposed on you, you must have paid them at closing or settlement or directly to a taxing authority. Mortgage interest rate deductions will only apply if you took out a loan to purchase your home, which then had an interest rate used for “acquisition debt.” To qualify for both, you’ll have to itemize your deductions.
We all know homeownership is expensive. Why not take advantage of all the benefits you’re allowed?
Now, let’s provide you with an answer to the burning question, “Is a roof replacement tax deductible?” A roof can be deducted from your taxes if it meets the criteria for being a capital improvement. What exactly is a capital improvement? The term refers to a project that adds a permanent structural change or restores an aspect of a property to enhance the overall value, prolong its usefulness, or adapt it to new uses. In other words, if it is a complete roof replacement and not just minor repairs, it’s a capital improvement.
In some circumstances, your roof replacement might be partially deductible. For example, if you work remotely full-time and have a home office, you may be able to write off a portion of the replacement cost on your taxes. Another example where you can partially deduct the roof replacement cost is if it belongs to your residential rental property. Other circumstances that may qualify your roof for a partial deduction include:
So, is your new roof tax deductible? Since roof replacements are considered home improvement projects that will add value to your home long-term, you can claim it on your taxes. In some instances, though, you won’t be able to deduct the total cost at once. In some instances, a depreciation schedule may be required, which divides the price over the usefulness and lifespan of the project. Note that you cannot regain labor costs for the roof replacement.
Is a roof repair tax deductible? Unlike entire roof replacements, roof repairs are largely not considered tax deductible. Roof repairs refer to small projects such as replacing damaged shingles, patching leaks, fixing loose flashing, or addressing ventilation issues. It could also include minor maintenance issues like debris cleanup. Ultimately, it comes down to fixing specific elements of your roof instead of replacing the entire component, which will be less expensive.
There are a few exceptions to the general rule of roof repairs not being deductible. If you own a commercial or rental property, you can claim its roof repairs as a business expense. Another example of an exception is if the repair was part of a move to improve energy efficiency with specific materials that meet Energy Star rating standards. In Texas, like across most of the country, you can deduct the repair from your taxes if the repair is considered a capital expense. Review the following bullet points to determine if your repair falls into one of these limitations or exceptions.
Are roof repairs tax deductible? In short, no. According to the IRS, repairs are only considered tax-deductible if they meet capital expense qualifications such as energy efficiency improvements. Repairs refer to only fixing certain areas of the roof and not the entire thing, so it’s not considered a large enough or vital project to be deducted. However, you may be able to claim it if the repair counts as a business expense.
As a homeowner, you must understand the tax implications of a roof replacement or repair project. You can save money if you take advantage of the proper knowledge and professionals. Before you attempt to claim a tax deduction for a roof replacement or repair, be sure to consult with a tax professional. Tax professionals are well-versed in real estate codes and can determine with certainty if you can write off a project. They will explain applicable tax implications, offer advice, and help you navigate the complex language of tax codes.
For example, did you know about the benefits of the Inflation Reduction Act that could be applied to you? A tax professional does. In 2022, the act was signed into law, which offers homeowners looking to move toward energy-efficient practices through upgraded roofing systems tax credits. By consulting with a tax adviser, you can learn about the credits you may benefit from, including those for insulation, windows, skylights, and more. In instances where this applies to your project, you may be able to claim an IRS roof replacement deduction.
Let’s recap— is a roof repair tax deductible? No, repairs are not deductible, at least under most circumstances. Is a new roof tax deductible? Yes, if your roof replacement meets certain parameters set up by the IRS, you may be able to subtract the cost from your taxes. To determine whether or not your project completed by Top Choice Roofing & Construction meets these qualifications, meet with a tax professional.
For more information or to schedule an appointment, call (210) 500-9131 or email us at contact@topchoicerc.com. Follow us on Instagram and Facebook to stay updated with our latest projects!
