Business taxes are rarely a fun topic to tackle. Your tax bill is often higher than you expect, and there are frequently complicating factors that need to be addressed before everything can be filed and finalized.
With that said, there are some steps you can take to get ahead of the game and at least position yourself for the best possible tax season for your business. In fact, you can use an exciting project like the construction of a new metal building to help you save on taxes while your business grows at the same time. We’ll take a closer look at that idea in the content below.
Ready to get started now on a new commercial building? The team here at American Carports, Inc. will be happy to help. You can use our Build & Price tool to get started on your design, and you’re always welcome to contact us if you need assistance.
Disclaimer: You should always work with a tax professional before making any important decisions that are going to impact your tax picture. There are always variables and exceptions that need to be considered, and the business tax picture for one company differs from that of another. Therefore, while the information below can help inform your thinking on this topic, it is advisable to consult a qualified professional before proceeding with any plans.
How Metal Buildings Qualify for Business Tax Deductions
If you are going to gain a tax advantage from the purchase of a new metal building, it will likely be through the use of Section 179 in the tax code. That section allows for the deduction of the full price of a building or equipment in the same year it is put into service. If your building does qualify, which you will need to confirm, you could deduct 100% of the cost of that building from your tax filing.
This stands in contrast to the option of depreciating the building’s cost over several years or even decades. Deciding how to account for your building costs is a complex topic that should involve your tax professional and accountant, but for many businesses, the option of deducting the full cost now will be too appealing to resist.
Using Section 179 to Reduce Your Metal Building Tax Burden
Some limits apply to the size of deductions you can take through Section 179. However, if you exceed those limits, you can utilize bonus depreciation to write off the remaining purchase price over time through a percentage-based depreciation process. This can include specific components of your new building, such as the HVAC system or electrical setup.
At this point, you will be wading into more complicated accounting territory, and the need for proper help from a qualified professional will be even more important. Using tax rules to your advantage can be a significant financial benefit for your business, but only when done properly.
Other Financial Benefits of a Metal Building Investment
It would be a mistake to view the financial implications of your metal building purchase solely through the tax lens. This is an important factor to consider, of course, but there are other reasons why buying a new metal building could be a great choice for your business.
First, this is a new asset that you will be adding to your company’s ledger. Having more assets makes your business more valuable, gives you something to borrow against, and generally raises the ceiling on what is possible moving forward. Additionally, since metal buildings are renowned for their efficiency and reliability, you can expect to experience savings over time in terms of lower utility costs and reduced maintenance expenses.
Anytime you are making a major purchase like adding a new building to your property, it’s important to look at all of the variables that will impact the choice you make. Roll together the tax implications with things like lower maintenance costs and the value of a new asset to see just how much you stand to gain from this one project.
FAQs About Metal Building Business Tax Benefits
Can I write off the full cost of a metal building in one year?
Yes, if your metal building qualifies under Section 179, you may be able to deduct the full purchase price in the year it’s placed into service.
Does a metal building qualify for bonus depreciation?
In many cases, yes. If you exceed Section 179 limits, bonus depreciation can help offset the remaining cost.
Are metal buildings considered assets for my business?
Yes, metal buildings are tangible assets that can increase your business’s value and offer collateral potential.
Should I consult a tax professional before purchasing?
Absolutely. A qualified tax advisor can ensure your investment is eligible and maximized for tax savings.
Build a Custom Metal Building
There’s no point in spending any more on taxes than is absolutely necessary to comply with the law. If a new metal building can be added to your property for a functional purchase while also delivering a tax benefit, it’s hard not to see that as a win-win situation. Get started on this project today, and you might be amazed by the possibilities!
