8 Most Common Landscape Expenses For Landscaping Business

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Small business owners associated with the landscaping industry usually find it difficult to manage the cash flows. Running a business where you spend most of the time on the field means you hardly get time to check tax deductions and other employee wages. And of course, you can’t keep a tab on the tax time, creating estimates, and scheduling appointments.

Since the landscaping business brings you opportunities to meet clients who want outdoor improvements, you can expect higher expenditures too. And with the increasing rates, tax deduction takes place amid landscaping costs. Well, if you don’t know about the tax return and taxable income, you should have a read.

Keeping those landscape designing tasks aside, how well are you aware of the tax deductions in your business? If not, in this blog we will shed more light on the common landscaping expenses. Small or large, all landscaping businesses depend on the business structure. Furthermore, it will also influence the expenditures deducted on the tax return.

What Are Tax Deductions In Landscaping Business?

Basically, the amount directly withdrawn from your income is tax deductions. If you have business-related expenses deducted directly from your income, you will have less taxes to pay. Consequently, it may influence your business profits. Hence, you should keep your invoices, tax bill, and other receipts in the vault to earn benefits at tax time.

Many small business owners like you keep a ledger to record all money transactions. Yes, it is the necessary step, which will count at the time of tax return submission. But when it comes to tax time, you will have to take care of employee wages, labor works, marketing strategies, and what not? In such scenarios, you can ask a tax professional to help you out.

You might have a question, why installing a flower bed or grass sod is considered while submitting a tax return. These landscaping business amounts fall under the internal revenue service, and so, all these landscaping services are tax-deductible. Alright, let us discuss more on other tax deductions in the landscaping business.

How Are Landscaping Costs Useful At Tax Time?

If you are running a landscaping business, your past business expenses will count at the time of filing a tax return. What you need to do is ask your financial advisor whether service costs are expensed or not. This is because these landscaping costs are not tax-deductible and as a result, it may help you pay fewer taxes.

Also, if you are spending more money on your daily scheduled tasks, then you must check if they can be expensed. It would lower your amount in a tax return and thus, your business income may have a rise. However, other expenses on vehicles, components, and service charges will be considered in the tax deductions.

In case you own rental property, then it will be tax-deductible as internal revenue services would consider it as part of your investment. Apart from this, if there are health concerns it will also be a part of tax-deductible.

In a nutshell, as far as you are able to depreciate your landscaping expenses, you may have reduced taxes to pay. Hence, this is how you can get rid of the hefty tax deductions.

Here is the list of things you should consider while filing tax return:

  • Purchase of business components
  • Permit costs for project work
  • Rental property for office use
  • Bank transactions receipts
  • Invoices and payments
  • Vehicle expenses
  • Medical expenditures
  • Repair & maintenance bills
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8 Common Tax Deductions For Lawn Care Business

Below-mentioned is tax deductions for any landscaping business. You must keep a track of the following eight things during the submission of a tax return.

  1. Insurance

    Landscape insurance

    Being a business owner of landscaping services, you must have your business protected by long-term insurance. This lawn care insurance includes all on-field services. So, if anything goes wrong when you are at work, your money remains in the safe case. Although, the tax will be applied for the item which is not covered in the insurance. For instance, if you do not have health insurance covered in your package, the tax would be deducted from your income.

  2. Employee Wages

    In terms of payments, you need to look after those employees or contractors working for your landscaping company. The wages you pay to them will be under the tax deduction and this amount would be the reason for your less tax payment. If you are a small business owner working as a freelancer, then you also need to pay taxes for your tradesmen and drivers. In addition to that, taxes will be applied to the extra labor costs required at the time of service.

  3. Service & Maintenance

    Service maintenance

    In your routine life, you will get many calls regarding the service and maintenance of landscaping design. For that, you can send your best landscape contractors to the owner’s house, and simultaneously, you can deduct the amount from the repair and maintenance work. The repair work done for the multiple items will be complicated for you to label as a tax. Therefore, it would be better to ask your financial advisor to avoid describing the same expenses.

  4. Self-employment

    Landscape designers who are working on small-scale projects also need to pay taxes for themselves and their workers. Here, approx 12-15% tax would be deducted from your overall income. And that’s why many small business owners usually find it annoying. Positively, self-employment tax will be tax-deductible and therefore, you may have to pay less during the tax return. For example, if you are the sole proprietor of landscape companies, there will be self-employment tax of a certain amount from your net income.

  5. Gardening Equipment

    Garden equipment

    Components and equipment used to carry out the activities in the outdoor living space come into the huge expense category. To take your landscaping service in top listing landscaping companies, it is obvious that you will invest behind the small or large components. These all materials used for gardening and landscaping purposes will have taxes on them. It is better to approach your accountant as not all of them will be depreciated.

  6. Rental Property

    No matter you work from an office or turn a rental property into an office, as long as they are connected with your business, taxes are applicable. As per IRS, the use of such property, which is on rent can be mentioned while filing the tax return. We recommend you take guidance from your accountant if the rented property is not in its same condition. For example, let’s say you have occupied 30% of your rented house for office use, then 30% will be your tax deductions.

  7. Marketing

    Landscape marketing

    You must have seen small business owner who does everything to promote their landscaping services. Just like that, you too need marketing professionals who can market your landscape services. Marketing services like mailers, pamphlets, booklets, or online advertising materials will have tax deductions. Moreover, if you post advertisements regarding your product in the local newspaper tax charges are applied. Nowadays, email marketing could also be the reason for the marketing tax.

  8. Vehicle Expenses

    Having expertise in landscaping design, you are likely to travel from the office to a job site and vice versa. With that, your vehicles required to offload the landscaping materials can have a deduction in the expenses. Including it, maintenance and vehicle repair costs are also added to the taxes. As a landscaping business owner, you can apply taxes on rented cars or trucks. Besides, the rented machine used like a lawnmower or lawn care unit can be part of tax deductions.

Frequently Asked Questions
  1. Shall I count landscaping services in tax?

    Landscaping services like installing artificial grass sod, sprinkler system, or an outdoor kitchen can have tax deductions if and only if they qualify IRS guidelines. Small business owners may even count landscaping costs of their rent or lease equipment. Vehicles used for offloading the products can have tax deductions as well.


  2. Are home improvements are Tax-deductible?

    Those landscape designers who occupy the home for personal usage can have home improvements as non-tax deductible. On the other hand, these home renovations help you reduce taxes at the time of the sale. Also, it will increase the value of your house. The amount used behind the improvements will be included in the tax basis.


  3. Will tree trimming be capitalized?

    In case, you have a tree trimming call to ensure the safety of the residents from natural calamities or bad weather, it will count as an expense. The removal of the tree, which is included in the entire lawn care project, can be capitalized at the tax time.

Conclusion

Leading a landscaping business is not that easy. It requires lots of effort as you need to look after material cost, installation process, workers, and your clients. In this process, you might often skip saving the significant documents required during the lawn care process. And this may adversely affect your submission of the tax return. Sometimes you may feel like mixing up the things, but learning the facts about taxes will help you optimize your business.

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Author Bio
Jeel Patel
Jeel Patel
Founder

Jeel Patel is the Founder of InvoiceOwl and is the main curator & writer of the content found on this site. With ideals of quality, commitment, and perseverance, he believes in creating lasting business relationships with the clients.

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