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Tax Deductions for Lawn Care Businesses

By Lindsey Rudy

Published on 15 Feb 2024 6 min read

Your lawn care business offers benefits you won’t get when you work for someone else. Running your own company means you’re the boss, but you also get all the responsibilities. For example, you need to report income from your business on your tax return and pay taxes. You can lower your tax bill by taking tax deductions for lawn care businesses. 

Common Tax Deductions for Lawn Care Businesses

You pay tax on your earnings when you run a lawn care business. The good news is you can write off ordinary and necessary expenses you pay for your landscaping business. Common tax deductions for lawn care businesses you might be able to claim include:

Self-employed Tax Deduction

If you run your business as a sole proprietor, you must pay a self-employment tax of 15.3% of what you earn. The good news is you can take a tax deduction for 50% of this self-employment tax on your personal return.

Landscaping Tools and Supplies

Shovels, rakes, hand-held sprayers, and other lawn and garden tools are tax-deductible when used for your landscaping company. You can also write off lawn care supplies such as grass seed, weed killer, and pesticides.

Rent

Does your lawn care company rent a warehouse or storage space to keep equipment and supplies? If you answer yes, you can write off your rent payments if you use the space for your business. If you rent landscaping equipment and tools for your business, your payments may be tax-deductible.

Depreciation

If you buy commercial-grade equipment, like a lawn mower, equipment trailer, or tree trimmer, you can’t deduct the total cost you paid in the year of purchase. Instead, you get a tax deduction. When you depreciate an asset, you expense a portion of what you paid over its useful life.

Business Insurance

If you carry property and general liability insurance, the premiums paid are tax-deductible if they are ordinary and necessary expenses for your business.

Vehicle

Your vehicle is likely an essential part of your landscaping business. You can deduct the business-related portion of your vehicle expenses if you use your personal car or truck for work. You calculate your vehicle expense deduction using one of the two methods: standard mileage or actual expenses.

The IRS sets the standard mileage rate at $0.655 for 2023 and $0.67 for 2024. To calculate your tax deduction using this method, multiply your total business miles for the year with the standard mileage rate.

You can also calculate your vehicle deduction based on the actual expenses for the year. Under this approach, you calculate the ratio of business use and total vehicle use using mileage for the year. Multiply this ratio by what you paid for the year in allowable vehicle expenses, like repairs and gasoline.

In most cases, you choose each year which method you want to use. So, you can calculate your vehicle expense deduction both ways to see which gives you a better tax break.

Self-employed Health Insurance

If you operate your lawn care business as a sole proprietorship, you might be able to deduct the premiums you pay for health insurance. You could be eligible for the self-employed health insurance deduction if you meet specific requirements:

•  Earned income: The self-employed health insurance deduction cannot exceed your lawncare business’s income. So, if your company has a tax loss for the year, you can’t deduct your premiums.
• No other coverage: The self-employed health insurance deduction applies only when you cannot participate in another plan. If you can get health insurance through your spouse or employer, you cannot take the self-employed health insurance deduction even if you choose not to go with their coverage.

Advertising

The money you pay to advertise your business may be tax-deductible. You can write off these expenses by promoting your company with digital ads, billboards, or printed materials, like flyers and business cards.

Repairs and Maintenance

You can deduct the general repairs and maintenance done on landscaping equipment used in your business. However, include your work vehicle’s repairs and maintenance costs with your car expenses.

Home Office

You may qualify for a tax deduction if you have a dedicated office or workspace in your home. With the home office deduction, a portion of your insurance, mortgage interest, and utilities may be tax-deductible.

Even if you rent space to store your landscaping equipment and supplies, you may still qualify for the home-office deduction when:

• You have dedicated a room or area you regularly and exclusively use for your lawn care business.
• Your home office is your principal place of business. Even though you visit landscaping clients, your home office could qualify as your principal place of business if you perform certain administrative and management tasks, such as bookkeeping and billing.

The home-office deduction is calculated based on the percent square footage of your workspace compared to your home. You then multiply this percentage with relevant expenses to determine your deduction.

You may also use the simplified method to determine your home office deduction. Multiply the square footage of your home office space by $5 (the IRS allowable amount) to figure your deduction. The home office deduction is limited to $1,500 under the simplified method. 

Expenses that Do Not Qualify for Lawn Care Business Tax Deductions

You can deduct most business expenses that meet the IRS’s definition of ordinary and necessary. While you may pay for goods and services related to your landscaping operations, not every expense qualifies as deductible.

• Actual vehicle expenses: While you get a tax deduction for vehicles used for your business, you cannot deduct the actual vehicle costs if you claim the standard mileage deduction on your return.
• Fines and penalties: Parking tickets, moving violations, and other fines are not tax-deductible.
• Membership dues: You cannot deduct dues or fees paid to country clubs, golf associations, recreational organizations, or social clubs. If you buy tickets to concerts or sporting events, these are also non-deductible expenses even if they are business-related. 

How to Prepare for Tax Filing and Monitor Tax Deductions for Lawn Care Businesses?

Preparing to file your taxes is something you do year-round. Below are some best practices to help you stay on top of your tax deductions and get ready for tax time.

• Maintain books: An online bookkeeping solution, like doola Books, tracks your business income and expenses. You stay on top of your finances and avoid missing deductions.
• Keep receipts: The IRS can disallow deductions if you cannot support them. Be sure to keep receipts, invoices, canceled checks, and credit card slips as support for your business deductions.
• Track mileage: Since you conduct most of your lawn care work at customers’ homes or businesses, keep a current log of the miles you travel to help capture your miles for tax time. 

How to Claim Tax Write-Offs for Lawn Care Businesses?

As a sole proprietor, you report your business activity to the IRS on Schedule C of your tax return. Tax deductions directly related to your business activities, such as lawn care supplies, business insurance, repairs, and vehicle expenses, are listed on Schedule C.

Other tax write-offs you get as a lawn care business owner show up in different areas of your tax return.

• Self-employment tax: Include the deductible portion of your self-employment tax on Schedule 1 of your personal tax return.
• Self-employed health insurance deduction: Include your tax-deductible premiums on Schedule 1. 

Lawn Care Business Write-Offs Can Save You Money

Running your own lawn care business can be stressful. You could easily find yourself pulled in multiple directions by service calls and equipment repairs. Thankfully, taking care of the books for your business can be stress-free.

doola Books is an easy-to-use bookkeeping platform that links directly to your accounts. With its simple reporting style, you can easily see your business finances and effortlessly identify possible tax-deductible expenses. 

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