Is a roof repair tax deductible? Or are there other ways to achieve tax savings with a roof repair? Many homeowners mistakenly believe that a “major” roof repair will provide a tax deduction. Other homeowners assume that no roof repair offers an opportunity to receive a tax benefit. Actually, certain roof repairs that are upgrades could qualify as a tax advantage for the savvy homeowner. At O’LYN Roofing, we understand this complex topic. Let’s break it down.
What Is A Tax Deduction?
A tax deduction is an amount taxpayers can subtract from their taxable income to reduce their tax liability. For example, a taxpayer with a taxable income of $45,000 will have a $4,500 tax liability, assuming a 10% marginal tax rate. Taxpayers who qualify for a $1,000 tax deduction will decrease their taxable income to $44,000. In this case, they will incur a $4,400 tax liability, assuming a 10% marginal tax rate. The taxpayer achieves a $100 tax liability savings on a $1,000 tax deduction.
Is A Roof Repair Tax Deductible?
A roof repair is considered maintenance to keep your home in reasonable condition and preserve its livability. Common roof repair projects include mending loose or damaged shingles, fixing flashing, replacing pipe boots, or resealing caulking.
Homeowners cannot typically receive a tax deduction from a roof repair or replacement. Few, if any, instances exist where a simple residential roof repair that does not turn into a material upgrade or “home improvement” would qualify for a tax write-off.
Although a specific class of “home improvement” projects may be eligible for a tax benefit, most home improvements do not offer tax savings, whether in the form of a tax deduction, credit, or otherwise. A few energy-efficient exceptions apply.
However, a homeowner should not discard the value of a home improvement. Upgrading the roofing system may increase the property’s basis (e.g., resulting in an adjusted basis) and reduce a capital gains tax liability at the time of sale.
Expert tax professionals, including CPAs and financial planners, recommend a homeowner maintain written records (estimates, invoices, and receipts) of all home improvements, including roof replacements and tangible upgrades to the roofing system.
What Roof Alterations Offer A Tax Benefit?
Your roof is a system of interconnected components, including the surface materials, sublayers, ventilation, and insulation. Each facet of your roof must function in unison to perform optimally. If, for example, your roof experiences poor ventilation, problems will arise, including ice damming, excess condensation, and heat buildup. These deficiencies may cause your roof to age prematurely.
To promote energy-efficient improvements in home ownership, the Department of Energy (in conjunction with the IRS) extends federal tax credits such as:
- Installing new skylights.
- Performing a home energy audit, which includes an assessment of the roofing system.
- Upgrading insulation or air sealing material.
These tax savings opportunities are available to conscientious homeowners.
As a homeowner, how do you know if you qualify for a tax advantage through this energy efficiency program? Tax professionals, including CPAs, accountants, tax attorneys, and financial advisors, recommend consulting with your preferred advisor to receive guidance. Depending on your expected annual income, you could receive a reduction in your tax liability when completing an upgrade.
How Much Of A Tax Credit Is Available?
A homeowner can claim 30% (up to $1,200 aggregate annually) of the eligible cost to make energy-efficient home improvements. The following “roofing system upgrades” are available:
Windows & Skylights Tax Credit
A homeowner may receive a federal tax credit for 30% of the product cost, up to a maximum of $600, for installing a new skylight on their residential rooftop. The skylight window must fulfill the Energy Star Most Efficient criteria to qualify for this credit.
Home Energy Audit Tax Credit
A homeowner can claim 30% of costs, up to a maximum of $150, for securing an inspection and written report from a certified home energy auditor. The audit “must identify the most significant and cost-effective energy efficiency improvements” and an estimate.
Insulation Tax Credit
A homeowner could qualify for a federal tax credit of 30% of the product cost, up to a maximum of $1,200, for purchasing and installing new bulk insulation products (batts, rolls, blown-in fibers) or reducing air leaks with caulking, weather stripping, or spray foam.
Working With A Roofer To Achieve Tax Savings
Based in Norwood, MA, O’LYN Roofing also has offices in Boston and Wellesley. We are the leading residential roofing company in Massachusetts. For over 50 years, we’ve remained this region’s trusted local roofing professional. We offer expert roof replacements and repairs, and skylight installation services.
Contact us today if you have questions about your roofing system or want to schedule an appointment.
Disclaimer: O’LYN Roofing is not a licensed tax advisor or CPA. The information provided is for general informational purposes only and should not be considered as tax advice. We recommend consulting with a qualified CPA or tax professional to address your specific circumstances and ensure compliance with applicable tax laws and regulations.
