When it comes to tax time, home and small business owners across the nation wonder what expenses they can use to help with their taxes in order to ensure they are getting the most optimized return. What many don’t realize is that there are many landscaping expenses that can help you with your taxes.
While you should consult a tax specialist for any tax related questions, here are a few additional questions you may have if you’ve racked up some landscaping expenses this year:
Are Outdoor Improvements to My Home Tax Deductible?
According to the IRS, major improvements to landscaping such as installing a sprinkler system, major outdoor tree planting, a new driveway, or a fence or walkway project adds to the adjustment of the basis of your home. If you own a $300,000 home, and you spend $5,000 on landscaping expenses, which helps when you go to sell your home, especially if this is a second home or a vacation/rental home.
Can I Deduct Landscaping Expenses for My Home Office?
If you use your home as a home office, then any landscaping you do can technically be considered as a work expense. According to 2008 case precedent, if you meet clients at your home office than making it look good is tax deductible. However, you can only deduct what you’ve spent on landscaping expenses at the same percent of which the size of the home office is. For example, if your home office takes up 10% of your home, you can deduct 10% of your landscaping expenses.
Again, ensure everything is reasonable – things such as a new driveway, walk-up steps or a ramp, and other necessities are less likely to get flagged than potted plants.
How Are Landscaping Expenses for Rental Property Tax Deductible?
If you own a property that you make money off of, then it’s a business and therefore lawn care, repairs, and maintenances can be expensed because they are necessary to keep the property in its original condition. But keep in mind, those necessities are different than improvements (which are landscaping expenses incurred to add value to the home). If you make changes to avoid the depreciation of the property, than you can file it under the special depreciation or section 179 depreciation on your taxes.
When Running a Business, Landscaping Expenses are Helpful at Tax Time
While your tax specialist can help you understand if your landscaping costs are able to be expensed, the common rule of thumb is that if the expenses go towards a business or income, they are more likely helpful at tax time. If your landscaping expenses go towards the day to day running of your business, then you should inquire if you are able to expense them.
If you run a landscaping business, then all of the regular business expenses apply – things such as employee wages, insurance, equipment, accounting – so it’s best to consult a proper tax specialist to help you with your taxes and all the expenses you can claim.
As an individual or small business owner, as long as your landscaping expenses are within reason and help ensure that you are able to do business or maintain your home from depreciating, then you may be able to expense those landscaping projects.
To learn more about how Arborgold can help with all your business software for your landscaping business or home office, take a tour of our products today!