Owners of commercial AC systems: listen up! If your system is creating a problem, you might be thinking: should I change my R22 air conditioner? If so, we’ve got a great message for you.
Due to the tax laws, you can now get a huge tax break when you install a new HVAC system. Generally, savings can be $5,000! Or much higher for an extensive system. That really can help balance the expense to change your R22 air conditioner.
The truth is, if your older Air Conditioner utilizes the refrigerant R22 (also known as Freon), you’re going to be smart to replace it in the next year or so (more about this to come). If you do it sooner, you’ll save money.
Why It’s Good To Change Your R22 Air Conditioner Now?
Have you noticed regarding the phase-out of the refrigerant known as R22 or Freon, that was utilized in air conditioners for years? If your AC unit is more than 10 years old, it probably uses R22.
Well, it turns out that R22 is quite harmful to the environment. That is why it’s being phased out according to regulations in the EPA. Now, R22 will no more be supplied or produced in the U.S. starting in January 2020.
What Does That Mean For Your Old R22 Freon A/C System?
Very Expensive Repairs In The Near Term
If it has been repaired lately, you probably noticed that the price was very high. That’s because the expense of R22 has skyrocketed as the production of R22 declines. The cause of the cost increase is the primary demand and supply. If attaching refrigerant to your air conditioner is necessary to make a fix (as it is for various kinds of repairs), that fix will become increasingly costly.
Your Days Are Numbered
After January 2020, your previous R22 air conditioner can’t be repaired in case your service company cannot get R22. Before long you will be made to substitute any R22 air conditioners you might have.
Imagine that for a moment. Swiftly everybody with an old AC that snaps will have to substitute their R22 air conditioner. Consider what the requirement for installing new air conditioners will be like in 2020.
Even now, the procedure for purchasing and installing a new AC unit may take weeks. Imagine how long it will take when you are waiting in line with everyone who’s made to replace R22 air conditioner?
That is why we suggest substituting your R22 air conditioner in 2019. You will save time and money by obtaining ahead of the rush. Now, let’s talk more about that taxation break.
Lower your tax bill when you substitute your R22 air conditioner this year. The new tax law comprises businesses to expense heating, air conditioning, and ventilation systems immediately.
Under the law, you can write off the entire cost of all parts in the year you buy them. That’s a massive change from the old tax rules. That could amount to a tax break of $5000 or more for a standard system! For an extensive business system with several components, the savings could be significant.
Before the new law, you needed to depreciate the expense of HVAC parts over 39 years. We wish the equipment lasted that long! Under the old accounting rules, your tax writes off will be a couple of hundred dollars when you bought an average $14,000 HVAC system.
Here’s an illustration from the Air Conditioning Contractors of America (ACCA)
“A restaurant owner installs a new heating and air-conditioning rooftop unit. The equipment and labor for installation cost $14,000. Under old depreciation rules, the restaurateur could only claim approximately $350 in depreciation expense annually over 39 years. Under the new law, she can deduct the full cost of the HVAC equipment (including installation costs) of $14,000 from her business income the year of the purchase and installation. At the top marginal tax rate that would be applied to this purchase, this will save her $5,180 in taxes.”