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What You Need To Know About Tax Deductible Roof Repairs




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4 November 2019

What You Need To Know About Tax Deductible Roof Repairs

Your roof is a crucial component of your home, and roof repairs and replacements are essential for ensuring your home is safe and holds its value. However, the cost of roofing work often makes homeowners consider what the implications are for taxes. Here are a few facts about how your roofing work can impact your taxes.

Deductible?

Roofing repair work is considered home repair work, and, as such, it isn’t generally tax-deductible. This is also the case for installing a new roof, although there is an important caveat when it comes to new roofs. If you run a business from home, you may be able to save on taxes when you install a new roof.

Increasing Your Home Tax Basis

Installing a new roof can be considered a home improvement, which restores part of your home to like-new condition or better. They also increase your home value should you choose to sell in the future. Because of this, you should save the invoices for the cost of your roof repair for if you sell Lexington, KY, area your home.

Home Tax Basis Examples

For example, if you pay $250,000 for your home and perform $30,000 in home improvement work, your home tax basis improves to $280,000. If you then sell your home for $400,000, you can subtract $280,000 from this amount, meaning the taxable amount due to the sale drops to $120,000. These savings might let you reduce your taxable basis to below the home sales tax exclusion amount. As with all tax issues, however, the details can get complex. If you have two roof replacements, for example, only the second one can be used to improve the tax basis of your home. Always talk with your tax professional to answer questions on your specific situation.

Home Office Use

If you have a dedicated home office and run a business, a portion of the money you spend on your home can be used to reduce your taxes. If you use a converted bedroom as a home office, for example, you may be able to use the percentage of your home used as an office as business expenses. In general, taxpayers with home offices will use the depreciation of a portion of work done as a deductible. Again, the law can be complex, and speaking with an expert can help ensure you’re maximizing your savings and staying within the law.

Just as talking to a tax expert is important, talking with roofing experts is essential if you’re in need of a new roof or roof repairs in Lexington, KY. If you have any roofing questions, reach out to AIC Roofing & Construction to learn more.

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