Can You Claim Landscaping on Your Taxes?

Landscaping expenses, while often enhancing a property’s appeal, are not always deductible for tax purposes. Homeowners often believe any home improvement expense qualifies for a tax break. The Internal Revenue Service (IRS) has specific criteria for claiming landscaping costs, largely depending on the expenditure’s purpose.

General Eligibility for Landscaping Deductions

Deductibility depends on the property’s use. Landscaping costs for a personal residence, such as routine lawn care or general beautification, are not tax-deductible. These are considered personal expenses or capital improvements that add to the home’s cost basis.

Deductibility hinges on whether the landscaping is for income-producing property or other specific, IRS-sanctioned purposes. For instance, landscaping for a rental property may be a deductible maintenance expense. Repairs and maintenance are expensed in the year they occur, while capital improvements are depreciated over years. Capital improvements are substantial enhancements that increase a property’s value, extend its useful life, or adapt it for new uses.

Landscaping Expenses for Business Purposes

Landscaping expenses are most commonly deductible when directly related to business activities. The treatment of these costs varies depending on the type of business property and the expense’s nature.

Rental Properties

For rental properties, landscaping expenses are deductible as ordinary and necessary business expenses. This includes routine maintenance like mowing, pruning, weeding, and general upkeep to keep the property attractive and functional for tenants. The IRS allows landlords to deduct these costs in the year they are incurred.

More significant landscaping projects, such as installing a new irrigation system or constructing permanent features, are considered capital improvements. These improvements add value to the property and have a useful life extending beyond one year. Capital improvements cannot be fully expensed in a single year but must be depreciated over their useful life, typically 15 years for land improvements under the Modified Accelerated Cost Recovery System (MACRS).

Home Offices

Landscaping expenses related to a qualified home office can be partially deductible. The home office must be used exclusively and regularly for business purposes. The deduction is limited to the percentage of the property used for business.

For example, if a home office occupies 10% of the home’s total square footage, 10% of the eligible landscaping expenses may be deductible. This deduction applies to expenses that benefit the entire property, such as general lawn maintenance. Landscaping that directly supports business activities, like enhancing curb appeal for clients who visit the home office, can be justified. However, expenses solely for personal beautification are not deductible.

Commercial Properties

Landscaping costs for commercial businesses, such as retail establishments or office buildings, are deductible as business expenses. Routine maintenance like mowing, trimming, and planting seasonal flowers is expensed in the year it occurs. These are considered ordinary and necessary costs to maintain the property’s appearance and functionality.

Larger landscaping projects that add significant value, extend the property’s useful life, or adapt it for new purposes are treated as capital improvements. Examples include installing new hardscaping or improving drainage. These capital improvements are depreciated over their useful life, often 15 years for land improvements.

Landscaping Expenses for Other Specific Purposes

Beyond business use, limited circumstances exist where landscaping expenses might be deductible. These scenarios have strict criteria to prevent deductions for personal beautification.

Medical Care

Landscaping expenses may be deductible if incurred primarily for medical care. This applies to modifications necessary for accessibility for a disabled individual, such as grading land for wheelchair access or installing specific plants to alleviate severe allergies prescribed by a physician. The expense must not be for general beautification or property value improvement. The primary purpose must be the alleviation or prevention of a physical or mental disability or illness.

Energy-Efficient Home Improvements

Certain landscaping-related items may qualify for residential energy credits. For instance, carefully positioned shade trees can reduce heating and cooling costs by up to 25% and are recognized for their energy-saving potential. Specific IRS criteria must be met, and the credit primarily applies to structural components and energy property rather than general landscaping. The Energy Efficient Home Improvement Credit allows for 30% of eligible upgrades, with annual limits, for property placed in service from 2023 through 2032.

Casualty Losses

Costs to restore landscaping damaged by a federally declared disaster may be deductible as part of a casualty loss. This deduction applies only if the loss is attributable to a disaster declared by the President. For personal-use property, casualty losses are deductible only if they occur in a federally declared disaster area. The deductible amount is reduced by any insurance reimbursement and is subject to a $100 reduction per event, plus a limitation based on 10% of the taxpayer’s adjusted gross income.

Required Documentation and Reporting

Maintaining thorough and accurate records is necessary for substantiating any claimed landscaping deductions in case of an IRS audit. Taxpayers should keep detailed documentation, such as invoices, receipts, and contracts for all landscaping services and materials purchased. Canceled checks or bank statements proving payment are also useful. For larger projects, especially those related to casualty losses or medical modifications, photographs taken before and after the work can serve as additional proof of the expense and its purpose.

Once deductibility is determined and expenses are documented, they must be reported on the correct tax forms. Landscaping expenses for rental properties are reported on Schedule E (Form 1040). If landscaping involves capital improvements, Form 4562 is used for depreciation. Home office landscaping deductions are calculated on Form 8829 and then transferred to Schedule C (Form 1040). Medical-related landscaping expenses are reported as itemized deductions on Schedule A (Form 1040). Costs to restore landscaping due to a federally declared disaster are reported on Form 4684, which then flows to Schedule A (Form 1040).