Just putting a new roof on your home doesn’t result in a tax break. The standard roof replacement does not qualify for any tax breaks. However, there are other routes to getting a tax break for your new roof, but they are quite restrictive.
Your Home Is a Business Location
If you use your home to generate income as a rental property, then the roof becomes a business expense. Business expenses can be itemized to reduce the amount you owe to the IRS for the profits you made using the home as a rental. You cannot occupy this home as your primary residence at any time for any amount of time during the year. While you own the property, you would have to live somewhere else all year long. If your home only acts as a rental property for seven months or less each year, you can’t deduct the “operating costs” of replacing the roof.
Energy Star Qualified Roofing Products
Home improvement projects that involve Energy Star qualified products can yield tax credits or tax deductions. Examples of these products include an energy efficient furnace or energy efficient water heater. Where roof replacements are concerned, there are metal and shingle roofing materials that are Energy Star qualified. Be sure to ask your contractor to install only the Energy Star products or you won’t qualify for this type of tax break.
Solar Power Panels on Your Roof
While replacing your roof and installing solar panels won’t result in a tax break for the roof per se, the solar energy conversion tax break will reimburse you at tax time for doing the solar conversion. The solar panels installed on your roof are part of the roof, so it is sort of like getting a tax break on the roof. Additionally, the break for going solar combined with the energy you will save by not having to pay high utility bills is akin to paying for a roof replacement over time. If you look at it that way, you are getting all kinds of financial breaks for going solar.
State and Local Tax Breaks
Some cities offer homeowners a break on their property taxes if you agree to improve your home’s exterior or improve the appearance of the property. There might be a program for property improvement that can help you with this project too. Some states encourage homeowners to improve their homes with additional tax breaks. Check with your city in Florida and then check with the state of Florida to see what is offered for roof replacement tax breaks.
Utilizing Your Tax Refund This Year to Get a Break Next Year
If you choose to use your tax refund this year to pay for the roof replacement, and you follow the restrictions for a tax break, you can earn back some of what you spent on the roof. For example, you spend your $5,000 tax refund this year on the roof. You purchase Energy Star energy efficient roofing products to take a break on next year’s taxes. Money the government gave back to you this year turns into some more money the government will have to give back to you next year.
Anything Done This Year Can’t Be Deducted Until Next Year
Keep in mind that since it’s already the new year, anything you do to replace your roof now to get a tax break won’t count on this year’s tax filing. However, it can count on next year’s taxes. Be sure to save the receipts from the roof replacement and documentation as to the type of materials and energy ratings (if applicable) that were installed. You will need to reference these things next year or leave them with your tax preparer or accountant if you have someone do your taxes for you.
Choosing to Wait Until the End of the Year
Seeing as these tax breaks for roofs aren’t exactly calculated based on the number of months you have a new roof, you could wait until closer to the end of the year to replace the roof. The cooler months of fall are also more ideal to getting a roof replaced because not as many roofing contractors are as busy as they are in peak season. You are maximizing your dollar by waiting for lower costs on materials and roof replacement labor and you still get the tax break in a few months.