‘Tax season’- two words that can strike fear into the heart of any small business owner, or even any individual. We all have to pay our dues to the government, but luckily, there’s always a bit of room to minimize how much you have to pay in taxes! After all, who wants all that damage to your wallet? That’s where tax write-offs come in. If you’ve already made certain expenses for your business, you can write a portion- if not all of it off, and reduce how much you pay in taxes! Landscaping businesses, like any other small business, have certain things they can write off, though some deductions will provide more for landscaping businesses than others!
Some of the things you can write off in a landscaping business are:
- Vehicle and equipment maintenance or rental
- Contractor and employee wages
- Advertising and travel expenses
- Insurance costs
- Legal services
- Your rent or mortgage! That’s right, if you run a small lawn care business out of your home, you may even be able to deduct significant portions of your bills!
Doesn’t that all sound good? If you file your business taxes instead of using the services of a professional, the odds are that you’ve been missing out on plenty of things you could’ve written off. If you’d like more information on the write-offs you may have missed, read on! It could be extremely helpful for next time!
Vehicle and Equipment Rental
If you’re a smaller business, you might just not be able to afford outright purchasing your equipment yet- and that’s okay! Everybody manages their company differently, so that could be the best way for you to make money at the moment. Even if you’re a larger company that owns your vehicles and equipment, you may have had to rent something during the year- perhaps one of your work vans broke down and you had to rent one while yours was in the shop. Maybe you had to rent a longer weed whacker because yours wasn’t a sufficient size.
No matter why you had to do it, if you had to rent something, you can write it off! Not just a portion of it, mind you- you can write off all of it, which can be a pretty hefty portion of your expenses, especially for a smaller business! The biggest caveat here is that you will have to provide extensive receipts for all of this. Every single payment must be accounted for if you want to write it off. This is a good business practice to get into in the first place, as keeping receipts can help in cases of potential audits as well as tax returns. Just don’t let it bleed into other fields, especially your personal life- you don’t want to be a hoarder! If you’ve got the receipts and you have the equipment or vehicles, you’ve got yourself a write-off!
Vehicle and Equipment Maintenance
If you do happen to own your vehicles and equipment, sometimes you need to perform some maintenance. We all know how it works- one day your truck’s air conditioning is blowing cold as ice, driving down the street in perfect working condition. You go to turn the truck on the next day, and it’s not working at all and if it is, the so-called ‘air conditioning’ is just blowing hot air into your face! Maybe, even, a blade broke on your best mower, or the gas tank in your weed whacker developed a hole. Unfortunately, these things happen. It’s not just a risk of owning a business, it’s a risk of owning anything!
Thankfully, you can write this off as well. Even if you are just sending in your work van or work truck for routine maintenance, like an oil change or a new air filter, these can be deducted as well- you’re just going to need to keep the receipts once again! This is going to be a recurring theme, but it’s something important to drill into your head. Keep those receipts!
Unfortunately, this is something of a complicated deduction, so you will need to make sure everything is kept straight and in order. You don’t want to claim anything twice; that could lead to serious issues for both your company and your wallet!
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Contractor and Employee Wages
If you’ve got several employees, you probably spend a good chunk of money every payday, and you probably don’t even want to think about how much that accrues over the year. Employee wages can be a huge chunk of the money your landscaping business spends over the year, and as long as they fit the following requirements, they can be written off on your annual tax forms! The requirements for this are:
- The wages must be for ordinary and necessary reasons.
- The wages must be reasonable in amount.
- The wages must be paid for actual services provided
- The wages must be paid or incurred in the year for which you are filing your taxes.
Smaller companies may prefer to not keep any employees on payroll, save for the owner. To save costs, at least temporarily, you might prefer to hire contractors or freelancers to help you with larger jobs or to take some weight off your shoulders and go do jobs on their own. It might be pricey at the moment, but not to worry- these, too, can be written off!
Not just the wages, but any additional payments related to wages and contractor payments can also be written off! This includes things like social security payments. Whether you’re a large or a small business, you can take advantage of this write-off!
Insurance Costs
Insurance- does anybody like dealing with it? Insurance policies may feel like a drain at the time, but when an accident happens in the field, you’ll be glad you had it. Thankfully, insurance payments can be written off as well! You can deduct premium costs on your vehicles and equipment, as well as any liability insurance you might have.
Unfortunately, you cannot deduct your employee’s health insurance premiums, though you can claim them as an income adjustment. For more on this, just see Form 1040’s ‘Schedule 1’ on your tax form.
Advertising and Travel Expenses
If you own a landscaping or lawn care business, the odds are you do a lot of traveling- and if you don’t, your employees probably do. I’d be willing to bet you’re not managing to simply teleport your employees and equipment to your client’s lawn!
Whether you’re driving out to a customer for an estimate or to provide service, you’re traveling! As long as you keep a log of your travel time, travel expenses, and mileage- once again, keep those receipts!– you can write off either your operating expenses for the vehicle or the standard mileage rate. This can vary from year to year, so make sure you’ve brushed up on what you can claim. In 2020, this rate was 57.5 cents per mile, while it was down to 56 in 2021. You can see why you’d need to double-check this!
As for advertising, how useful this write-off is depends on how much you spend on advertising- obviously! If you’re the type of company that relies on word-of-mouth, it won’t matter much to you, though if you spend a significant chunk of cash printing flyers, running online ads, or buying billboards, you’ll be happy to know that you can deduct all of it!
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Legal Expenses
Let’s hope you don’t have to write this off- nobody wants to be embroiled in a legal battle. But, if you do find yourself wrapped up in legal fees, these can 100% be deducted! Lawyer fees and even the services of accountants are professional, legal services, and as such are allowed to be written off entirely.
Your Home Office
If you run a small landscaping business, you may be working out of a designated ‘home office’. If you are, you’re in luck! As long as this room is used exclusively for your business, you can deduct a plethora of related costs from your taxes. Some of the big things that you can write off are your internet and phone bills, your office supplies, the cost of buying and stocking your printer and computer, and even parts of your rent and mortgage! Just remember to keep receipts for these things, of course- and that this room has to be used exclusively for business.
In Conclusion
To wrap it all up there are many things you can write off for your landscaping or lawn care business, and all of it is perfect for saving you money! These tax write-offs are geared more towards smaller businesses, so if you’re a one-or-two-man operation, working out of your home and renting or leasing your equipment, occasionally hiring contractors or freelancers for larger jobs, you’re perfectly poised to take full advantage of all these benefits!
Even if you’re a larger business, there’s plenty for you to use! As your insurance will likely be pricier than smaller companies, being able to write off even a portion of it could be a huge benefit. If your company encounters legal issues, you could write those off, as well- along with advertising costs!
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Frequently Asked Questions
Can I write off my equipment and vehicle purchases?
Unfortunately, not- only equipment and vehicle maintenance and rental can be written off. If you send your work van to the mechanic shop, you can write off those expenses, but not if you get a new one!
Can I write off hospital expenses for injured employees?
No, but this is exactly why it’s a good idea for companies to have insurance policies in the first place- and those you can write off!
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.