Is lawn care tax deductible for rental property​?

Last updated: December 31, 2024

Maximizing Tax Deductions: Lawn Care Expenses for Rental Properties

Owning rental property is a rewarding investment, but it comes with operational costs that can affect your profitability. One often-overlooked yet essential aspect of rental property management is lawn care. Maintaining a property’s exterior is vital for attracting and retaining tenants, and the good news is that these expenses are often tax-deductible. However, navigating the IRS guidelines and understanding the nuances of lawn care tax deductions requires careful planning. This comprehensive guide synthesizes the essential elements of lawn care tax deductions, equipping landlords with the knowledge to maximize their tax benefits while remaining compliant with regulations.

Understanding Rental Property Tax Deductions

As a rental property owner, understanding tax deductions is critical to optimizing your financial outcomes. The IRS permits landlords to deduct "ordinary and necessary" expenses related to managing, maintaining, and preserving their rental properties. By reducing taxable income, these deductions directly impact your bottom line.

Common Deductible Expenses

Some of the common deductible expenses for rental properties include:

• Operating expenses -- i.e. lawn care!
• Mortgage interest -- i.e. DSCR loan
• Property taxes
• Depreciation
• Repairs and maintenance
• Insurance premiums -- i.e. landlord insurance

Lawn Care as a Deductible Expense

Lawn care falls under maintenance costs, a category of deductible expenses aimed at preserving the property's condition and appeal. Common lawn care activities like mowing, fertilizing, trimming, and weed control are considered "ordinary" because they are standard practices in property management. They are also "necessary" as they contribute to tenant satisfaction and ensure the property remains competitive in the rental market.

However, it is crucial to differentiate between maintenance and improvements. Maintenance activities—routine tasks to uphold the property's current condition—are immediately deductible. In contrast, improvements—projects that add significant value or extend the property’s life—must be capitalized and depreciated over time.

Classifying Lawn Care Costs: Maintenance vs. Improvements

Maintenance

Maintenance activities are essential to a rental property's ongoing functionality and aesthetics. These include:

• Regular mowing
• Fertilization
• Weed control
• Pest management specific to the lawn
• Seasonal tasks like leaf removal or mulching

These activities do not add significant value to the property but are necessary to maintain its appearance and functionality. The costs for these activities can be deducted in the year they are incurred.

Improvements

Improvements involve substantial changes that enhance a property’s value or adapt it for a different use. Examples include:

• Installing a new sprinkler or irrigation system
• Landscape redesign
• Planting trees or shrubs that significantly alter the property’s appeal

These costs must be capitalized and depreciated over several years, as specified by IRS guidelines. Misclassifying improvements as maintenance can lead to penalties or rejected deductions.

IRS Guidelines for Lawn Care Deductions

The IRS provides clear criteria for determining whether an expense is deductible. The expense must:

1. Be "ordinary and necessary" for the operation of the rental property.
2. Be directly tied to rental activity.
3. Be well-documented with receipts, invoices, and payment records.

Ordinary and Necessary Criteria

Ordinary expenses are standard in the rental property industry, such as routine lawn mowing and weed control. Necessary expenses, while not mandatory, are considered helpful and appropriate for maintaining the property's condition and tenant appeal.

Documentation Requirements

Proper documentation is essential to substantiate your deductions. This includes:

• Receipts and invoices from service providers
• Proof of payment (e.g., canceled checks or credit card statements)
• Service contracts and agreements
• A log of maintenance schedules

Allocating Lawn Care Costs for Mixed-Use Properties

For properties used for both personal and rental purposes, lawn care expenses must be allocated proportionally. For example, if you occupy 40% of the property and rent out the remaining 60%, only 60% of the lawn care costs are deductible. This calculation can be based on square footage or time of rental use.

Accurate allocation is crucial for compliance and avoids misreporting expenses. Maintain detailed records to ensure clear delineation between personal and rental usage.

Specific Lawn Care Expenses That May Be Deductible

Here is a breakdown of lawn care and landscaping expenses that typically qualify for tax deductions:

Routine Maintenance

• Mowing
• Edging and trimming
• Fertilizing
• Weed and pest control

Seasonal Care

• Leaf removal
• Snow and ice removal from driveways and sidewalks
• Mulching

Professional Services

• Hiring landscapers or lawn care companies
• Contracting for snow removal or seasonal cleanups

Supplies and Equipment

• Lawn care tools and equipment (e.g., mowers, trimmers)
• Fertilizers, weed control products, and pest treatments

Avoiding Common Tax Mistakes

Misclassification

One of the most frequent errors is misclassifying improvements as maintenance. Ensure you correctly identify and report each expense according to its purpose and IRS definitions.

Inadequate Documentation

Failure to retain receipts, invoices, or payment records can lead to denied deductions. Adopt an organized record-keeping system to track all expenses related to your rental property.

Overlooking Mixed-Use Allocations

If your property serves dual purposes, accurately allocate expenses based on rental use to avoid IRS scrutiny.

Tax Filing: Reporting Lawn Care Expenses

Lawn care expenses should be reported on Schedule E (Form 1040) under "Repairs and Maintenance" or another relevant line item. Be meticulous in categorizing these expenses to ensure accurate reporting.

Example: Lawn Care Tax Deduction

Let’s illustrate with a scenario:

• You own a single-family rental home and spent $1,200 on lawn care in one year ($100/month).
• You report this expense on Schedule E, reducing your taxable rental income by $1,200.

If your total rental income is $15,000 and other deductible expenses amount to $5,000, your taxable rental income becomes:

$15,000 - ($5,000 + $1,200) = $8,800

This reduces your tax liability, enhancing the profitability of your rental investment.

Leveraging Tax Professionals and Local Regulations

When to Consult a Tax Professional

A tax professional can provide valuable insights, especially for complex scenarios like multi-family units, significant landscaping improvements, or mixed-use properties. Their expertise ensures you maximize deductions while remaining compliant.

Understanding Local Laws

State and local tax regulations can influence what expenses are deductible. Regularly consult local tax resources to ensure alignment with regional requirements.

Best Practices for Maximizing Deductions

Develop a Maintenance Plan

Plan regular lawn care services to avoid costly, non-deductible repairs. Consistent upkeep minimizes tenant turnover and enhances property appeal.

Organize Your Records

Store receipts and documentation systematically, using digital solutions like cloud storage for easy access and backup.

Stay Updated on Tax Laws

Tax laws evolve. Keeping informed about IRS updates and consulting professionals ensures compliance and reduces the risk of missed opportunities.

Review and Audit-Proof Your Claims

Before filing, review all deductions to ensure accuracy and adherence to IRS guidelines. Cross-reference each deduction with proper documentation to safeguard against audits.

Additional Considerations for Strategic Tax Planning

Depreciation for Major Landscaping Projects

If you undertake significant landscaping projects like installing a new irrigation system or redesigning the lawn, calculate depreciation accurately. Report these expenses over the recovery period specified by IRS rules.

Utilizing Technology for Record-Keeping

Leverage property management software to streamline expense tracking and documentation. Many tools provide integrated solutions for organizing receipts, invoices, and tax-related documents.

Planning for Seasonal Lawn Care Needs

Anticipate seasonal requirements, such as snow removal in winter or leaf management in fall. Incorporating these into your maintenance plan ensures consistent property upkeep and deductible expenses throughout the year.

The Long-Term Financial Impact of Lawn Care Deductions

Enhancing Property Appeal and Value

While lawn care deductions reduce immediate tax liabilities, the broader impact includes improved tenant satisfaction and reduced vacancy rates. Well-maintained properties attract higher-quality tenants, leading to stable rental income and fewer turnovers.

Avoiding Future Costly Repairs

Regular lawn maintenance prevents larger, more expensive issues, such as pest infestations or erosion problems. By deducting these costs, landlords benefit from both immediate tax savings and long-term property preservation.

Importance of Tenant Communication in Lawn Care

Maintaining open communication with tenants regarding lawn care expectations can significantly enhance the management process. For single-family rentals, where tenants may handle some lawn care tasks, clear lease agreements are crucial. Specify whether lawn maintenance is the tenant's responsibility or included as part of the rental package. Clarifying these expectations avoids misunderstandings and ensures the property is well-maintained.

For multi-family properties, where shared spaces are common, landlords should establish a regular maintenance schedule for outdoor areas. Highlighting the benefits of these services in tenant communications fosters goodwill and reinforces the value of their rental experience.

Leveraging Lawn Care for Marketing

A well-maintained property exterior is a powerful marketing tool. High curb appeal attracts prospective tenants and enhances the property’s perceived value. Highlight lawn care efforts in property listings and advertisements to stand out in competitive rental markets. Investing in consistent lawn care not only supports tax deductions but also drives higher occupancy rates and rental income.

Conclusion: Strategic Tax Planning for Rental Property Owners Includes Lawn Care

Strategic tax planning is essential for rental property owners seeking to optimize their investments. By understanding the nuances of lawn care deductions, maintaining detailed records, and seeking professional advice when necessary, you can confidently navigate the complexities of tax reporting. Proper classification and diligent documentation of lawn care expenses not only ensure compliance but also maximize your financial returns.

For landlords, every dollar counts. Leveraging the IRS’s provisions for deductible expenses—including lawn care—can significantly enhance profitability. With the right approach, tax season becomes an opportunity to save money and invest in the future success of your rental property portfolio.

By adopting these practices and proactively managing your property’s maintenance, you set yourself up for sustainable growth and financial success in the competitive world of rental property investment.

---

---

Grow and optimize your rental property portfolio with OfferMarket

OfferMarket is a rental property investing platform. Membership is entirely free and includes access to the following:

🏠 Off market properties
💰 Private lending
☂️ Landlord insurance rate shopping
💡 Community & insights

Our mission is to help you build wealth through real estate. If you are not already a member, we hope you will accept our invitation to join us!