When homeowners have a new roof installed, some make the mistake of thinking that they can automatically write it off from their taxes. This isn’t always the case, however, as home improvements aren’t usually deductible on your 1040. Thankfully, there are a few special cases when you can write your new roof off as a tax deductible improvement.
In this post, ReNew Home Designs discusses the different methods you can use to claim your new roofing system as a tax deduction.
Depreciation is only an effective alternative to tax deductions if you own a property that you rent out. If this is the case, you can write off the roof repairs as a deduction. Roof replacements also count as an improvement since it adds a substantial amount to your property values. In this scenario, you won’t be claiming a tax deduction and instead, you’ll recover the cost by depreciating the value of the new roof every year. Depending on the IRS-approved method you use, this can take anywhere between 27.5 to 40 years.
The destruction of your property due to unexpected events like fires, storms, or a meteorite strike is often defined as a casualty. If your roofing system is affected by any of these events, you can claim the loss as a tax deduction because your home’s value took a blow. However, keep in mind that you won’t be able to claim any casualty losses that your insurer reimburses you for.
To claim your new roof as a tax deduction, always include everything you spent on the roof when adjusting your basis. So long as you own the home you’re living in, always keep records of your spending to prove that you’re depreciating the right amount and have adjusted your basis correctly.
Turn to ReNew Home Designs for your home improvement needs. We are your leading provider of siding and window installation services. Give us a call at (410) 415-1226 or fill out our contact form to get a free estimate. We serve homeowners in Ellicott City, Columbia, and other nearby areas in MD.