Deducting lawn care for rental property: Tax rules explained

Can you shave dollars off your tax bill by deducting the cost of keeping your rental property’s lawn pristine? The short answer is yes; however, there are a few conditions.

Lawn care expenses can indeed be deducted, but they must meet specific criteria set forth by the IRS. Whether you’re a seasoned landlord or new to the game, understanding tax-deductible lawn care expenses could change how you manage your rental property’s upkeep.

Let’s mow through the details to help ensure you’re not letting any savings wither away when tax season rolls around.

 

Lawn care expenses: What can you deduct?

Tax deductions for your rental property don’t have to be complicated, especially with lawn care expenses that can maintain curb appeal and help attract high-quality tenants.

The IRS recognizes that maintaining the aesthetic and functional appeal of your property’s outdoor space is about more than vanity. It’s also necessary for keeping your property appealing and rentable.

That’s why specific lawn care costs are deductible, provided they fall within the category of regular maintenance rather than improvements or personal labor.

Deductible Lawn Care Expenses

Lawn care expenses that are generally tax deductible for a rental property include the following:

  • Professional mowing services: to keep the grass at an acceptable length and your property well-groomed and attractive.
  • Landscaping services: to maintain existing garden beds, shrubs, and trees. This includes pruning, weeding, and mulching for healthy growth and curb appeal.
  • Pest control treatments: to prevent damage to lawn and garden areas from insects or diseases that can affect the lawn’s health and appearance.
  • Lawn fertilization: to promote healthy grass growth so the lawn remains lush, green, and free of unsightly patches.
  • Aeration services: to improve soil condition, helping the lawn breathe and absorb nutrients more effectively, which contributes to its overall health and resilience.
  • Irrigation system maintenance: to provide efficient watering of the lawn and garden areas, including sprinkler system repairs to keep them operating correctly.

 

Maintenance vs. improvements

With tax-deductible lawn care expenses, it’s important to differentiate between maintenance and improvements.

Maintenance costs are expenses you incur to keep your property in a rentable state without significantly enhancing its value. You can subtract these expenses from your income in the year they’re incurred, thus reducing your taxable income and tax liability.

Improvements are financial investments you make to increase the property’s value, extend its life, or adapt it to new uses. These capitalized costs depreciate over time, providing a tax benefit spread across several years rather than an immediate deduction.

Lawn care, for the most part, fits into the maintenance category. Regular mowing, edging, fertilization, and pest control are examples of maintaining the property’s existing landscape. These measures preserve the property’s appearance and functionality, preventing any depreciation in its value due to neglect.

However, certain lawn care activities can be considered improvements. For instance, installing a new sprinkler system is a significant investment, potentially increasing its market value and curb appeal. Overhauling the landscape with new sod, trees, or garden features can also be seen as an improvement since it fundamentally enhances the property’s aesthetics and functionality.

 

IRS rules and guidelines for deducting lawn care expenses for rental property

According to the IRS, lawn care expenses must be both “ordinary and necessary” to qualify as deductions. This means the cost of lawn care should be common and accepted in your real estate business, contributing directly to maintaining your property’s appeal and use for tenants.

Additionally, these expenses can only be claimed within the tax year they were paid or incurred. This helps ensure deductions align with the period’s rental income, providing a clear and accurate financial picture.

The IRS requires landlords to maintain records, such as receipts, invoices, or canceled checks, as evidence of their lawn care expenses. These documents should detail the nature of the work done, the cost, and the service date, linking them clearly to your rental activity.

When filing your taxes, report these expenses on Schedule E (Form 1040), Supplemental Income and Loss. This form lets you list your rental income and various deductible expenses, including lawn care, which adjusts your taxable income from rentals.

IRS Topic no. 414 offers valuable insights and guidelines on what constitutes rental income and allowable deductions, helping landlords accurately report their rental business activities.

 

Other common rental property expenses

Beyond the neatly trimmed edges of your rental property’s lawn lies a broader landscape of tax deductions that savvy landlords can use to reduce their taxable income further. Being aware of these deductions is crucial for maximizing your investment’s profitability.

Here are some of the most common rental property expenses the IRS allows you to deduct: 

  • Property taxes: A significant annual expense, property taxes paid on your rental property are fully deductible.
  • Mortgage interest: Interest payments made on a rental property mortgage can be deducted, reducing the cost of borrowing.
  • Operating expenses: Deductible day-to-day operational costs incurred for your rental include property management fees and general maintenance.
  • Insurance premiums: You can deduct the premiums paid for insurance policies covering your rental property (e.g., landlord liability, fire, flood insurance).
  • Depreciation: While you can’t deduct the cost of the rental property in the year of purchase, you can deduct a portion of this cost over several years through depreciation.
  • Professional services: Fees for legal advice, accounting services, and tax preparation for managing your rental property are deductible.
  • Travel expenses: Costs incurred while traveling for reasons directly related to the operation or maintenance of your rental property can be deducted.
  • Advertising costs: Deductible expenses associated with marketing your rental property include online listing fees or print advertisements.
  • Home office expenses: If part of your home gets used exclusively for business related to managing your rental properties, you may be able to deduct a portion of these home office expenses.
  • Utilities: The utility fees you pay for your rental property, such as water, electricity, gas, and sewer services, are deductible if they’re not covered or reimbursed by the tenant.

 

Recordkeeping tips for lawn care expenses

Maintaining a well-organized system for tracking lawn care receipts and invoices helps ensure every dollar spent on maintaining your property’s curb appeal is accounted for and readily accessible come tax time. Here are some practical tips to help you organize and store your lawn care expense records effectively:

  • Create a dedicated filing system.
  • Use digital tools for scanning and storage.
  • Maintain a detailed expense ledger.
  • Review and categorize your expenses regularly.
  • Do all the above (plus more) for free with Stessa.

With Stessa’s automated rental property accounting system, designed by landlords for landlords, you can say goodbye to the complexity of spreadsheets and manual entry. The intuitive platform simplifies your bookkeeping process, providing accurate reporting and real-time financial insights. 

Laptop and mobile screenshot of transactions page

Features like single-entry bookkeeping, receipt scanning via the mobile app, and straightforward categorization of income and expenses can make managing your portfolio easier than ever. Over 200,000 landlords use Stessa’s many robust tools, which include:

  • Automated bookkeeping and accounting
  • Mileage tracking for expense purposes
  • Centralized dashboard with key metrics and complete chart history
  • Rental applications
  • Tenant screening
  • Landlord banking*
  • Mobile app (iOS and Android)
  • eSigning for documents and leases
  • 60+ landlord legal forms and templates

With access to every financial transaction at your fingertips, Stessa can help you crunch your numbers confidently and make informed investment decisions.

Sign up with Stessa today to simplify your accounting process and focus on growing your portfolio.

 

*Stessa is not a bank. Stessa is a financial technology company. Terms and conditions, features and pricing are subject to change. This article, and the Stessa Blog in general, is intended for informational and educational purposes only, and is not investment, tax, financial planning, financial, legal, or real estate advice.

 

The post Deducting lawn care for rental property: Tax rules explained appeared first on Stessa.

Check Also

Tee Off in Style: Exploring the Golf Courses of Newport County, Rhode Island

Tee Off in Style: Exploring the Golf Courses of Newport County, Rhode Island

Newport County, Rhode Island, is a golfer’s paradise. It offers an impressive array of courses …