Lawn care business tax write-offs are one way you can make your taxes work for you! We’re going to give you a comprehensive list of tax deductions for lawn care business to help you legally maximize your return and lower how much you pay in, and we’ll help you understand your deductions below.
Understanding lawn care business tax write-offs
When you own a small business, you know how essential your bookkeeping and accounting services are. You have to keep track of all of the money that goes in and comes out throughout the year.
The IRS requires all small business owners to submit annual tax returns and pay their taxes according to their income. Since this can be complex, we recommend you consult an accountant to help you pay self-employment tax, Medicare, and Social Security taxes.
However, as a small-business owner you can offset the amount of taxes you have to pay by taking as many tax deductions for a lawn care business as you can.
For example, you can deduct every business-related expense you pay from your income. As a result, your profit margins will go down, and you’ll owe fewer taxes.
While it’s important to check with your business’s accountant about specific deductions, there are many common lawn care business tax deductions, and we’ve outlined them below.
9 tax deductions for a lawn care business
Although lawn care business taxes can be complicated, these deductions can help reduce your stress come tax time. Whether you pay annually or quarterly, using the most deductions possible can help take the sting out of filing your taxes.
1. Travel expenses
Many people drive to each customer to give an estimate and return to each location when they complete the job to ensure your employees performed the work correctly. Additionally, your employees drive work trucks to each job and back.
The IRS lets you deduct travel expenses, as long as you keep a log of them for record-keeping purposes. You can either deduct the expenses that come with operating your vehicle, or you can deduct the standard mileage rate. (This deduction increases to 67 cents a mile in 2024.)
2. Advertising
Think about how much you spend on advertising each year. You run online ads, put ads in your local community newspapers, and print flyers to mail to prospective clients. At the end of the year, you can deduct all of the money you spend on advertising for your business on your tax return. Depending on how much you advertise, this could be a decent amount.
3. Insurance
Most lawn care business taxes include areas to claim insurance expenses. You most likely have insurance on your vehicles and equipment, as well as liability insurance. You can deduct these premium costs.
However, this doesn’t include your employee health insurance premiums. The IRS allows you to claim health insurance premium expenses as an income adjustment using Form 1040’s Schedule 1.
4. Vehicle and equipment maintenance
Your equipment and vehicles will need routine or large repairs at least once throughout the year, if not more. You can deduct the amount of money you paid to have your vehicles and equipment fixed.
However, this is a complicated deduction, and you want to make sure you don’t claim it twice. This is especially true if you already claimed car and truck expenses for the year.
5. Equipment rental or lease
Lawn care business tax write-offs extend to equipment rental or lease expenses. Maybe you don’t have a large fleet of vehicles, so you rent or lease a truck, machinery, or other lawn equipment. If so, you can deduct these expenses from your annual taxes.
Pro Tip: You have to have good receipts to prove all of these expenses to the IRS.
6. Home office
If you run your lawn care business out of your home, you most likely have a dedicated home office. This is where you do a lot of your administrative work, like paying bills, ordering supplies, and interacting with customers. You can deduct your internet costs, office supplies, phone, computer, printer, and even a portion of your rent or mortgage.
The rule the IRS has for this deduction is that the room has to be exclusively for your business.
7. Contractor expenses and employee wages
Any lawn care business that has freelancers or contractors working for it can deduct their wages come tax time. This can be a substantial deduction for you, and it includes other payments related to their work like Social Security payments on Schedule C.
8. Legal and professional services
Do you have an accountant to prepare your tax return or payroll? Maybe you periodically work with a lawyer to help sort through your legal issues. If so, these are professional and legal services, and the IRS allows you to deduct them on your taxes.
9. Equipment depreciation
Over the course of a year, your lawn mowers, trimmers, leaf blowers, and other equipment will depreciate in value, even if you don’t use them. These expensive pieces of machinery (your zero-turn mower especially) can help you with your taxes.
How this tax deduction works: Your accountant can calculate the depreciation expense for each piece of machinery, and you use this depreciation to reduce your tax burden.
Final thoughts on our list of tax deductions for a lawn care business
As we’ve touched on, it’s important for you to have a good understanding of which tax deductions you can claim for your business. After all, what business owner doesn’t want to legally reduce the amount of money they pay in each year to the tax authorities?
While taxes can be confusing or overwhelming for many people, knowing your rights and arming yourself with knowledge can improve your income level and business status. As always, we recommend you consult a tax accountant to make sure you get the most out of these nine tax deductions to make sure you file your annual taxes correctly.
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