As someone who gets their income through a business in lawn care, you may also be eligible to get tax deductions for landscapers. After all, you will likely have a lot of expensive gear to buy and business-related expenses to handle.
With that in mind, what are the tax deductions that you are eligible for as a landscaper? What can you do in order to make your tax-keeping easier? Do you get tax money back when you buy business equipment? Well, read on to figure out what tax deductions you may take advantage of.
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If you work as a landscaper or gardener, offering your service to other people, then the IRS will see you as a self-employed business owner who is subjected to income tax. This means that you will need to report your income and your tax deductions when you file for tax return.
Besides the income tax, a person who has a landscaping business will also have to pay self-employment tax. This will include taxes that will go into your Social Security and Medicare.
A total of 15.3% is going to the self-employment tax. 12.4% of that tax will go to Social Security, whereas the other 2.9% will go into Medicare. Bear in mind that you will have to pay quarterly estimated taxes throughout the tax year, by the due dates set by the IRS.
Try our free tool to calculate how much you'll owe in self-employment taxes.
As long as you meet the qualification, the IRS allows you to put landscaping as a tax-deductible business. Bear in mind that your name needs to figure as the business owner, as well as the owner of the property where the income goes to.
If you are a renter, then you may not be able to deduct the costs of landscaping, no matter if you pay for the lawn care costs or not. This is because the IRS deems it a capital investment.
Small business owners working from home but meeting the clients at their houses may be eligible for tax returns. They may deduct a portion of the total costs, depending on how much of their property is used as a business.
In other words, even if you have a lawn care business that takes you into the gardens of other people, you must have at least a room in your house you can call your "home office." That home office may contain everything from your paperwork to your landscaping gear.
Like every small business that a self-employed person may have, a landscaping business will also give you the opportunity for tax deductions. If you are into lawn care, here are the tax deductions that you may write off when tax time comes strolling
Landscaping tax affects everyone differently, which is why you may want to collaborate closely with the IRS and your tax advisor. Whatever tax deduction you may have to write off, they can help you with your tax return.
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The lawn mower is tax-deductible, so yes, you can get tax deductions on it. To put it simply, everything that small business owners use for the purpose of the company may be written off. You just have to prove that you are using the lawn mower for your landscaping business, and you should be able to write off the purchase price taxes.
It is mandatory to keep the records of every purchase that you make for your business. It's very easy to lose track of expenses, even the ones necessary to keep the lawn mower running - i.e., the gas. In the event of an audit, you must have a way to prove your expenses.
The lawn mower in itself is considered a "capital expense for your business. As a result, the tax deductions that you will receive may be spread over the total years in which you expect the lawn mower to last.
To make a simple example, the average $5,000 lawn mower lasts somewhere around 5 years, if used continuously for the business. Multiplying $5,000 by 20%, you get $1,000 - and that's exactly how much you can claim every year for the next five years.
Tax deductions for landscapers may be given to anyone owning a landscaping business. All you need to do is keep a record of your expenses when you file for tax return.
The tax law is set - and as long as you meet the requirements, you can get your deductions. With that in mind, here are some tips that you'll want to keep in mind if you want to get the most out of your tax return.
It might be tempting for you to claim one-time tax deductions for business equipment. However, if you want to save on your taxes, you might want to try the depreciation method instead.
Take an essential piece of equipment, and depreciate its cost over the past couple of years. You might receive more out of that depreciation when you get your tax return.
Depending on the state that you live in, you may or may not be subjected to sales taxes when offering your services.
Check with your state laws and make sure that you are handling your expenses and taxes correctly. The last thing you want is to have the IRS at your doorstep.
When you are deducting the travel expenses for your truck, you may want to be careful of the calculations - specifically, the cents per mile rate. The IRS mileage rate for businesses is 56 cents per mile. You may also use the truck expenses options provided by the IRS. Read our article on claiming the Standard mileage deduction versus actual expenses.
As a landscaper, there are certain expenses you may not get a deduction for at the end of the tax year. For example, while you may be able to deduct equipment, you may not be able to deduct an expense that was already reimbursed to you by the person who hired you.
Owning a lawn care business is a good way to generate income if you like gardening. However, just like the rest of the self-employed people that get their money through offering services, you'll also need to pay taxes. Hopefully, this guide gave you some ideas on how to handle your tax return.
A verbal contract (formally called an oral contract) refers to an agreement between two parties that's made —you guessed it— verbally.
Formal contracts, like those between an employee and an employer, are typically written down. However, some professional transactions take place based on verbally agreed terms.
Freelancers are a good example of this. Often, freelancers will take on projects having agreed on the terms and payment via the phone, or an email. Unfortunately, sometimes clients don't pull through on their agreements, and hardworking freelancers can find themselves out of pocket and wondering whether a legal battle is worth all the hassle.
The main differences between written and oral contracts are that the former is signed and documented, whereas the latter is solely attributed to verbal communication.
Verbal contracts are a bit of a gray area for most people unfamiliar with contract law —which is most of us, right?— due to the fact that there's no physical evidence to support the claims made by the implemented parties.
For any contract (written or verbal) to be binding, there are four major elements which need to be in place. The crucial elements of a contract are as follows:
Therefore, an oral agreement has legal validity if all of these elements are present. However, verbal contracts can be difficult to enforce in a court of law. In the next section, we take a look at how oral agreements hold up in court.
Most business professionals are wary of entering into contracts orally because they can difficult to enforce in the face of the law.
If an oral contract is brought in front of a court of law, there is increased risk of one party (or both!) lying about the initial terms of the agreement. This is problematic for the court, as there's no unbiased way to conclude the case; often, this will result in the case being disregarded. Moreover, it can be difficult to outline contract defects if it's not in writing.
That being said, there are plenty of situations where enforceable contracts do not need to be written or spoken, they're simply implied. For instance, when you buy milk from a store, you give something in exchange for something else and enter into an implied contract, in this case - money is exchanged for goods.
There are some types of contracts which must be in writing.
The Statute of Frauds is a legal statute which states that certain kinds of contracts must be executed in writing and signed by the parties involved. The Statute of Frauds has been adopted in almost all U.S states, and requires a written contract for the following purposes:
Typically, a court of law won't enforce an oral agreement in any of these circumstances under the statute. Instead, a written document is required to make the contract enforceable.
Contract law is generally doesn't favor contracts agreed upon verbally. A verbal agreement is difficult to prove, and can be used by those intent on committing fraud. For that reason, it's always best to put any agreements in writing and ensure all parties have fully understood and consented to signing.
Verbal agreements can be proven with actions in the absence of physical documentation. Any oral promise to provide the sale of goods or perform a service that you agreed to counts as a valid contract. So, when facing a court of law, what evidence can you provide to enforce a verbal agreement?
Unfortunately, without solid proof, it may be difficult to convince a court of the legality of an oral contract. Without witnesses to testify to the oral agreement taking place or other forms of evidence, oral contracts won't stand up in court. Instead, it becomes a matter of "he-said-she-said" - which legal professionals definitely don't have time for!
If you were to enter into a verbal contract, it's recommended to follow up with an email or a letter confirming the offer, the terms of the agreement , and payment conditions. The more you can document the elements of a contract, the better your chances of legally enforcing a oral contract.
Another option is to make a recording of the conversation where the agreement is verbalized. This can be used to support your claims in the absence of a written agreement. However, it's always best to gain the permission of the other involved parties before hitting record.
Fundamentally, most verbal agreements are legally valid as long as they meet all the requirements for a contract. However, if you were to go to court over one party not fulfilling the terms of the contract, proving that the interaction took place can be extremely taxing.
So, ultimately, the question is: written or verbal agreements?
Any good lawyer, contract law firm, or legal professional would advise you to make sure you formalize any professional agreement with a written agreement. Written contracts provide a secure testament to the conditions that were agreed and signed by the two parties involved. If it comes to it, a physical contract is much easier to eviden in legal circumstances.
Freelancers, in particular, should be aware of the extra security that digital contracts may provide. Many people choose to stick to executing contracts verbally because they're not sure how to write a contract, or they think writing out the contract terms is too complicated or requires expensive legal advice. However, this is no longer the case.
Today, we have a world of resources available at our fingertips. The internet is a treasure trove of invaluable information, platforms, and software that simplifies our lives. Creating, signing, and sending contracts has never been easier. What's more, you don't have to rely on a hiring a lawyer to explain all that legal jargon anymore.
There are plenty of tools available online for freelancers to use for guidance when drafting digital contracts. Tools like Bonsai provide a range of customizable, vetted contract templates for all kinds of freelance professionals. No matter what industry you're operating in, Bonsai has a professional template to offer.
A written contract makes the agreement much easier to prove the terms of the agreement in case something were to go awry. The two parties involved can rest assured that they're legal rights are protected, and the terms of the contract are sufficiently documented. Plus, it provides both parties with peace of mind to focus on the tasks at hand.
Bonsai's product suite for freelancers allows users to make contracts from scratch, or using professional templates, and sign them using an online signature maker.
With Bonsai, you can streamline and automate all of the boring back-office tasks that come with being a freelancer. From creating proposals that clients can't say no to, to sealing the deal with a professional contract - Bonsai will revolutionize the way you do business as a freelancer.
Why not secure your business today and sign up for a free trial?