Tax Reform and Fire Sprinklers - What You Need to Know

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The 2018 tax reform has been the biggest change in tax law in over 30 years.  One of these sweeping changes has affected fire sprinklers for commercial properties.

Part of the legislation was a change in Small Business Section 179 Expensing.



 

Since 1986, small businesses have been able to expense certain purchases such as computers, vehicles, and other equipment up to $500,000.  Now, small businesses can expense up to $1 million, including fire sprinklers.

Fire Sprinkler Expensing -- What you need to know.

Every year, small businesses can deduct $1 million in qualified expenses.  Starting in 2018, fire sprinklers can be written off on taxes.

This is allowed for commercial businesses.  Retrofitting fire sprinklers into residential structures is not included.  This law is permanent and is in full effect now.

The National Fire Sprinkler Association came up with samples to know what to expect in fire sprinkler costs.

Example 1:  Nightclub Retrofit

Space:  7,500 square feet

Cost to install fire sprinklers:  $6.00/square foot.

Total:  $45,000

Under new tax law:  You can write this expense off 100%.

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Example 2:  Bowling Alley

Space:  20,000 square feet

Cost to install fire sprinklers:  $4.50/square feet

Total:  $90,000

Under new tax law:  You can write this expense off 100%.

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