Landscaping initiatives are gaining momentum as spring approaches. The warmer weather serves as a reminder for homeowners to maintain their hedges, grass, and flowers. Landscaping businesses are available to fill in for people who don’t have the time, energy, or aptitude for grass care. If you work as a self-employed landscaper or gardener, you may be required to file a Self-Assessment tax return and pay taxes on your earnings. However, there are several expenses you can deduct from your income profit to lower the amount of tax you are required to pay.
Landscaping business claims include Insurance, Work and safety Clothing, Office Items, Vehicles, Advertising fees, Professional subscriptions, and memberships, Gardening Tools and equipment, and Finances.
It’s not about avoiding taxes as a professional in the landscape industry; it’s about making sure you’re paying what’s reasonable. This simple guide covers the ins and outs of permitted costs to help you understand what you can and cannot claim.
What are allowable expenses?
The critical, tax-deductible items that keep your firm operating smoothly are allowable expenses. You won’t be required to pay tax on the money you’ve spent as long as these expenses were incurred, primarily because of the operation of your firm.
To avoid unintentionally becoming a target of tax avoidance, it’s critical to understand what is and isn’t permitted. Because of this, it’s a good idea to maintain organization and keep track of the invoices coming into and going out of your business.
There are a few guidelines you should go by when reporting permissible expenses for your gardening business:
Rules to follow for claiming allowable expenses
- You can only claim expenses that you acquire totally and solely when operating your business daily.
- Expenses that serve both commercial and personal purposes are not admissible as claims. You can only claim the costs related to business users, and you’ll need to provide reasonable estimations.
- You can pay for business expenses using your company’s bank account, or you can claim the costs of personal expenses that you paid for and then have your company reimburse you.
- To defend your conduct, if your company expenditure claims are ever questioned, you should keep an accurate record of all your spending and their receipts.
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What expenses can I claim as a Landscaper?
It might be difficult to determine which costs you can deduct to lower your tax liability. You will benefit from this easy-to-read, thorough self-employment guide I have provided.
Insurance
You can claim all of your business’s insurance plans as an authorized expense. You should most likely have public liability insurance if you work as a landscaper. Suppose you’ve done something that has caused injury to a public member or damage to their property. In that case, public liability insurance will aid in defending your firm against loss and the expense of legal claims people make against you. Public liability insurance is not required, but it is a visible indication of the legitimacy of your company, can make your product seem more reputable, and may even help you attract more clients in the future.
Moving your gear between each client’s garden may require much travel time for a landscaper. It would be excellent if you additionally purchased vehicle insurance as it is essential to the efficient running of your company. In an accident, van insurance can pay for damage to your van and damage to third parties, as well as for shattered windows and windscreens, personal property, incorrect fuelling, and medical costs.
Although you’re more likely to have these two types of insurance if you work in the garden care and design industry, you can deduct any other type of company insurance.
Work & Safety Clothing
Work and safety clothes can be claimed as an authorized expense, but casual clothing or even professional attire like suits cannot. As protective clothing is required for the job, spending like steel-toed boots, gloves, eyewear, and noise-canceling headphones would be considered appropriate expenses. Don’t try to claim anything that isn’t strictly for work; clothing that could be part of a “daily wardrobe” won’t be covered.
Although you might try to include it as an advertising cost, branded apparel with your company logo will not be included as an authorized expense.
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Office Items
Given that most of your work as a landscaper is done outside and at clients’ houses, it’s doubtful that you’ll be claiming many office supplies. However, you are still eligible to claim any you use, like a business phone, postage, or stationery.
You can deduct a percentage of your power, broadband, and other costs if you routinely conduct business from your home, but you’ll need to figure out how much each is utilized for personal use and business.
Vehicles
You can deduct several extra expenses associated with using a vehicle for business purposes and your van insurance. As long as all those expenses are incurred for conducting business, this can include business travel and mileage, parking fines, gasoline, repairs, and upkeep.
Please be advised that you will not be able to deduct any permissible expenses from any fines or citations you receive while driving.
You might be able to determine your van expenses using a fixed rate (sometimes simplified expenses) for mileage rather than the real costs of purchasing and operating your vehicle. Although the process is much more streamlined, this won’t be as accurate, and you might miss out on some savings.
Advertising
Consider how much money you invest in advertising each year. You run internet advertisements, place advertisements in your neighborhood newspapers, and print fliers to mail to potential customers. You can write off all of the money you spend on business advertising when you file your taxes at the end of the year. This might be a respectable sum, depending on how much you market.
Finances
You can deduct certain business-related costs from your expenses, including bank fees for opening and running a firm and interest on loans taken out to launch the business. You might even claim back taxes for the costs used in employing an accountant to assist you if the thought of keeping track of all these allowed charges overwhelms you.
Travel expenses
To guarantee that your personnel executed the work appropriately, many people travel to each customer to provide an estimate and then return to each site when the task is finished. Your staff also drive work trucks to and from each job.
The IRS permits you to write off these costs as long as you retain a record of your travel expenses for record-keeping purposes. The usual mileage rate or the costs associated with operating your car may be written off.
Professional subscriptions and memberships
You might wish to subscribe to trade magazines or journals to stay up to date on the newest gardening trends and the greatest pest-prevention advice. You may deduct these as business expenses as long as they are associated with your line of employment. It’s good to know that membership in any professional trade body or organization in your field can be claimed as an approved expense. Joining professional bodies can have several advantages, such as making your business seem trustworthy to clients.
Equipment rental or lease
Rental or lease costs for equipment are tax-deductible for lawn care businesses. You may rent or lease a truck, machinery, or other lawn equipment if you don’t have a sizable fleet of vehicles. If so, you can write off these costs against your yearly taxes. To establish all of these expenses to the IRS, you must have acceptable receipts.
Equipment depreciation
Even if you don’t use your equipment, its value will decrease over a year. You can reduce your tax burden by using these pricey pieces of equipment. Each piece of machinery has a depreciation expense that your accountant can calculate; you use this depreciation to lower your tax liability.
Disallowable Expenses (Don’t Claim These)
Many of your costs may be covered by allowable expenses, but regrettably, some things unquestionably cannot be reimbursed. While not all-inclusive, the following are some items you cannot claim as an approved expense but still must pay taxes on:
- Penalties and fines for parking
- Tax fines and interest for late payments
- Unless there are unusual circumstances, lunch
- There is a tight line between training for learning new gardening techniques and training to hone ones already mastered.
- customer amusement
- Business suits or casual attire
- Your pension obligations
- Your wage
- Life insurance you have
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Frequently Asked Questions
Can I Deduct the Lawn Mower From My Taxes?
You can deduct taxes on the lawn mower because it is deductible. Simply put, everything a small business owner uses for commercial purposes may be written off. You should be allowed to deduct the purchase price taxes if you show that you are utilizing the lawnmower for your landscaping business.
Do Landscapers Have to Pay Self-Employment Levy?
The IRS will consider you a self-employed business owner liable for income tax if you operate as a landscaper or gardener and provide your services to others. This implies that when you file your tax return, you must disclose your income and tax deductions.
A person who runs a landscaping business must also pay self-employment tax and income tax. Included in this are the taxes that fund your Social Security and Medicare.
To learn more on how you can start your own landscaping business, check out my startup documents here.
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Meet Shawn Chun: Entrepreneur and Landscape Business Fan.
I’m a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop to an import and export business to an online review business plus a few more and now I create online resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet a landscape business owner at a job site, driving down the road or anywhere else I see myself. I know how hard the struggle is to retain clients, find good employees and keep the business growing all while trying to stay competitive.
That’s why I created Landscaping Business Boss: I want to help landscape business owners like you build a thriving business that brings you endless joy and supports your ideal lifestyle.