Whether you are an established owner of a roofing company or are just in the beginning stages of running your business, saving money and spending it wisely matters. Tax season is synonymous with owing money, however, if you are a business owner, one of the perks of tax season is that you have a lot of tax deductions at your fingertips which can help you to save in the long run. At Barta Busines Group, an accounting and bookkeeping firm for small businesses, we have put together a list of tax deductions for roofers that you need to take advantage of.

Tax Deductions for Roofers: What You Need To Know

Section 179 is a tax deduction opportunity created to encourage small businesses to purchase, finance, or lease equipment for their company. The section 179 deduction makes growth easier to achieve for small businesses, like family-run roofing companies. Along with the experts at Barta Business Group, a small business accounting firm in Denver, we will look at tax deductions for roofing companies. 

What is Section 179?

While qualified business assets have been eligible for tax deductions for some time, before the improved Section 179 was implemented, the government required you to spread out deducting the cost of your equipment over several years. Since 2017, however, greater benefits have been added to the Section 179 tax code, making same-year equipment purchases fully deductible up to a certain value. 

With these updates in place, up to $1 million of eligible assets purchased can immediately be deducted from their 2021 taxable income. This has a phase-out limit of $2.5 million with assets purchased in that tax year. 

Note: The IRS has increased the immediate tax deduction amount for eligible assets purchased in 2021. The new limit is $1,050,000.

What business expenses can I write off for 2021?

Let’s look at a few examples of tax deductions your roofing company could use for the 2021 tax season.

New Roofing Equipment:

Dumpsters

Whether it is a 10- or 20-yard container, dumpsters are an important part of roofing debris management. Confirm with your accountant whether your new dumpster can be used as a write-off under the Section 179 tax code.

Dump Trailers

Dump trailers are another key tool for the roofing company that could net another potential write-ff on your taxes.

Vehicles

For qualifying vehicles, the deduction is the same whether you leased, purchased, or are financing vehicles like pickup trucks and cargo vans. However, be sure to consult your tax accountant for specific vehicle restrictions under the Section 179 deduction.

New Office Equipment:

Computers

If you purchased any kind of computer (desktop, laptop, tablet), confirm with your accountant that it’s eligible for a business write-off.

Software

There are multiple roofing software options available to make managing your roofing business easier for you and your crews. Most software purchased by the general public (excluding proprietary or custom-coded software/databases) can be used as Section 179 tax deductions for roofing companies.

Make sure your roofing business takes full advantage of Section 179 tax deductions this year and in upcoming years as you purchase equipment to take your company to the next level.

About Barta Business Group

Most businesses are great at their craft, but not great at the financial back of the house. Our team of bookkeeping, accounting, and finance professionals guides business owners in making better decisions, so they can focus on doing what they love in their business. We understand the peace of mind that comes from knowing your financial information is done right every time. We value being able to support businesses in turning financial data into actionable insights, so you may plot a course for your company’s future with confidence.