When it becomes time to replace the roof at your home, it can be a bit stressful. Roof replacements are quite a large investment. If you’re like most homeowners, you may be wondering if you’re able to deduct your next roof replacement service from your taxes. We’re going to dive into more detail about the answer to this question below and provide you with some more information about the roof replacement process.
Under Normal Circumstances
When it comes to a roof replacement service for your primary residence, the federal government sees it as a home improvement project. Typically, home improvement projects are not tax deductible. This means that you won’t be able to claim a roof replacement service to reduce your tax burden for the year of installation. However, it’s important to note that a roof replacement is only considered a home improvement project under normal circumstances.
The Home Office Deduction
There are times when a roof replacement service may be tax deductible when it’s not considered done under normal circumstances. One of these such circumstances is if you have a home office. Typically, you’ll be able to deduct a portion of the roof replacement that’s equal to the square footage of your office. There are various stipulations to claim this tax credit, such as how many hours you work from that office. It’s best to consult with a CPA to determine what your actual tax write-off can be.
Rental and Commercial Properties
When it comes to a roof replacement on a rental or commercial property, you can typically claim some of the amount of the replacement service. In most cases, it must provide capital improvement to the property. This can be in the form of expanding its overall lifespan or increasing the structure’s curb appeal. In a lot of cases, this deduction will take place over multiple years instead of being claimed in a singular year. If you happen to rent out part of your home, that section of roofing may be eligible for a tax credit.
Home Improvement Tax Credit Program
The federal government has initiated the Home Improvement Tax Credit Program to encourage more homeowners to invest in energy-efficient products for their homes. One of the products that falls into this category is roofing. To be eligible for this tax credit, you’ll need to meet a few minimum requirements. The first and most important is that the house getting the roof replacement is your primary residence that you don’t rent out.
The roofing product that you choose to use must be ENERGY STAR certified. These roofing materials include things like metal and asphalt shingles that have special cooling granules. All of these products help to prevent heat from being absorbed. This helps to reduce the amount of heat transfer during the summertime and goes a long way in reducing air conditioning bills. Many of these ENERGY STAR-certified products work by reflecting the sun’s rays rather than absorbing them.
Understanding Tax Credits
If you find that you’re eligible for this tax credit, you’ll need to complete Form 5695 known as the Residential Energy Credits Form. This can be found on the IRS’s website and must be attached to your regular tax returns. When it comes to a tax credit, you are simply given a credit on the amount that you owe the federal government for the tax year. They do not send you a check for the tax credit amount that you are eligible for.
Additionally, this amount does not get deducted from the bill that you owe your roofing company at the time of the service. Because tax laws and credits can change from year to year, it’s important to consult your own CPA to determine what forms you’ll need to fill out and what you’re eligible to receive for your tax credit.
How Much Will Your Tax Credit Be?
Currently, homeowners can receive an incentive equal to 30% of the total cost of their new roof. However, there is a maximum tax credit amount of $1,500. This means that homeowners can receive up to $1,500 in the form of a tax credit when they invest in an energy-efficient roof for their home. This deduction is scheduled to run through December 31, 2032.
What ENERGY STAR Products Qualify?
Only select products qualify for this tax incentive based on their high solar reflectance and thermal emittance properties. While there is an extensive list of eligible roofing products on ENERGY STAR’s website, we’re going to go over some of the most commonly used ones below. Most of these fall into the cool roofing category. These products include shingles, membranes, coatings, metal, and even some tiles.
These cool roofing materials are specifically designed to lower the roof’s surface temperature, which helps to decrease the amount of heat that it transfers inside the building. This means that your home will stay cooler on those hot summer days, so you can be more comfortable while indoors. You won’t have to put a large strain on your air conditioning system, and you can even save money on your energy bills throughout the summer months.
In a larger setup, using cool roofing is a great way to do your part in reducing the urban heat island if you live in the city. Furthermore, keeping your roofing materials at a safe temperature goes a very long way in preventing premature deterioration. This leads to an overall longer usable lifespan for your new roof.
The Many Benefits of Getting a Full Roof Replacement Service
There’s no doubt that being able to recoup some of the costs associated with your new roof replacement is a great incentive for getting one. However, there are many other great benefits that you can enjoy from getting a new roof for your home.
Protect Your Home and Belongings
By far, one of the most significant benefits of getting a new roof for your home is that it can protect your home and belongings from harm. A new roof will keep out unwanted rainwater and protect your home’s overall building structure. Plus, it will protect all your belongings and your family who are inside of it.
Increase Home Value
One of the largest ways to enhance your home’s resale value is to have a new roof put on it. Homebuyers know that residential roofs are expensive to purchase. This is why they’ll be willing to pay more for your home over others that have an aging roof.
Lower Homeowner’s Insurance Premium
The age of your home’s roof has a very big impact on its insurance premium. An aging roof can remarkably increase your monthly insurance payment because there’s a much higher risk of damage to the property. Investing in a new roof can help to reduce your monthly premium rates so you can keep more money in your pocket each month.
Reliable Roof Replacement Service
Fraser Roofing, LLC offers reliable roof replacement service for the Atlanta, GA area. We can also assist with all your emergency roofing, gutter replacement, storm damage, and roof repair needs. Book an appointment with us today to get the roofing assistance that you need.
