Uncover the Surprising Tax Benefits of Rental Property Lawn Care

As a rental property owner, you might already know that maintaining your property’s lawn and landscaping is crucial for attracting tenants and keeping the property value up. However, did you know that lawn care for your rental property could provide significant tax benefits? Many landlords overlook the potential savings that come with including lawn care as part of their property maintenance. In this article, we will explore how lawn care can lead to tax deductions, explain the process of claiming those deductions, and offer some tips to ensure you’re maximizing your savings.

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Understanding Lawn Care Tax Benefits

The Internal Revenue Service (IRS) allows rental property owners to deduct certain expenses related to the upkeep and maintenance of their rental properties. This includes landscaping and lawn care. If you’re unsure of how to take advantage of this, don’t worry—below, we’ll break down how these deductions work and how you can benefit.

When you perform lawn care activities, such as mowing, fertilizing, or planting new shrubs, you’re not just enhancing the property’s aesthetic appeal; you’re also increasing its value and potentially its income-generating capacity. As a result, these activities can qualify as deductible expenses under IRS rules for rental properties. Let’s dive deeper into how this can work for you.

What Lawn Care Expenses Can Be Deducted?

Not all lawn care activities are eligible for tax deductions, but many are. Here’s a list of the common lawn care expenses that rental property owners can potentially deduct:

Routine lawn mowing and trimming: Regular mowing and maintaining your lawn help ensure it stays neat and presentable, which is a deductible expense.
Fertilizing: Whether it’s fertilizing the grass, plants, or flowers on your property, the cost of products and labor to maintain healthy plants can often be deducted.
Tree and shrub trimming: Cutting back overgrown trees or bushes not only improves the curb appeal of your rental property, but it can also be written off as part of your landscaping maintenance.
Mulching and soil treatments: Adding mulch around trees and garden beds or treating the soil to improve its quality qualifies as a maintenance expense that may be deductible.
Sprinkler system maintenance: If your sprinkler system needs repairs or regular servicing, these costs are deductible as part of your rental property’s overall upkeep.
Planting new landscaping: If you’re adding new landscaping or plants to your property, this is typically considered a capital improvement, and it may be depreciable over time.

How to Deduct Lawn Care Expenses for Your Rental Property

In order to take advantage of lawn care tax deductions, it’s important to follow a few simple steps. Below is a guide to help you through the process:

1. Keep Detailed Records

First and foremost, it’s essential to keep accurate records of all lawn care expenses. This means saving receipts for any materials purchased (fertilizer, mulch, tools) and any invoices from landscaping services you hire. Documentation is key when it comes to claiming deductions, and the IRS may require it in case of an audit.

2. Separate Personal and Rental Expenses

If you also live on the property you’re renting out (for example, if you have a duplex), you’ll need to separate your personal lawn care expenses from your rental property expenses. Only the costs associated with maintaining the rental unit’s lawn are deductible. However, if you maintain a shared lawn or garden space, you can divide the expenses between yourself and your tenants according to the portion of the property used for rental purposes.

3. Track Your Time

If you perform the lawn care yourself, it’s important to track the time you spend on the maintenance. While your time itself isn’t deductible, you can deduct the costs associated with the equipment and supplies you use to care for the lawn. If you hire someone to take care of the lawn, you can deduct their labor costs as a business expense.

4. Consult a Tax Professional

Tax laws can be complex, and the IRS guidelines surrounding deductions can change. To ensure you’re taking full advantage of available deductions, it’s wise to consult a tax professional who specializes in real estate. They can help you determine which lawn care activities qualify for deductions and ensure you’re following all necessary procedures.

Common Mistakes to Avoid When Claiming Lawn Care Deductions

While lawn care offers many tax benefits for rental property owners, there are some common mistakes that can result in lost deductions or even penalties. Here are a few mistakes to watch out for:

Misclassifying personal expenses: Be sure to differentiate between lawn care expenses for your rental property and those for your personal residence if you live on the property.
Claiming capital improvements as deductions: While landscaping costs are deductible, large-scale landscaping changes (like building a new patio or adding a pond) might be considered capital improvements, which are subject to different tax rules.
Not keeping receipts: Failing to maintain receipts and proper documentation for your lawn care expenses could result in missing out on deductions.

Other Lawn Care-Related Tax Deductions You May Qualify For

In addition to the standard lawn care expenses, there are other related costs that might qualify for deductions. Here are some examples:

Property management fees: If you hire a property manager to handle landscaping maintenance, those management fees are deductible.
Equipment depreciation: If you purchase equipment like a lawnmower, edger, or weed whacker to maintain your rental property’s lawn, you can depreciate the cost of those items over time, allowing you to claim deductions for them on your tax returns.
Fertilizer and pesticide expenses: As part of lawn care maintenance, any costs associated with fertilizers, pesticides, or herbicides used on your rental property’s lawn may be deductible.

How to Maximize Your Lawn Care Tax Savings

While the tax benefits of lawn care can be significant, there are ways to maximize your savings even further:

Regularly maintain your lawn: Frequent lawn care ensures that your property remains in top condition, and it allows you to claim ongoing maintenance expenses year after year.
Group similar expenses: If you’re investing in multiple landscaping improvements at once, such as adding a flower bed and installing a sprinkler system, you may want to group these expenses for tax purposes.
Consider seasonal landscaping needs: In some cases, lawn care expenses such as winterizing your irrigation system or pruning trees can be claimed during the off-season.

Conclusion: Don’t Miss Out on Lawn Care Tax Benefits

Lawn care might seem like just another expense, but for rental property owners, it can offer significant tax benefits. By properly documenting your lawn care expenses, separating personal and rental property costs, and working with a tax professional, you can reduce your overall tax burden while improving the appearance and value of your property. Be sure to keep accurate records, follow the IRS guidelines, and explore all the ways lawn care can help lower your taxes. Your rental property—and your bank account—will thank you!

For more information on tax deductions for rental property owners, visit the IRS website.

This article is in the category Guides & Tutorials and created by TheGardenScape Team