Nine 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. In 2018, this rate was 54.5 cents per mile.
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.
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. You do 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 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 equipment will depreciate in value, even if you don't use it. These
expensive pieces of machinery can help you with your taxes. Your accountant can calculate the
depreciation expense for each piece of machinery, and you use this depreciation to reduce your tax