If you’re like me, gardening isn’t just a hobby; it’s a way to save money and provide for my family. However, there are a lot of expenses that come with gardening so when it came to tax season, I got to wondering about all the deductions I could take. Before I go on, I should let you know that I do my own taxes using the free H&R Block online tax preparation tools, and I am not a licensed tax professional. When it comes to doing your taxes, you should always consult with a licensed tax professional. Nevertheless, I want to share with you what I found in regards to my garden and taxes.
So, are gardening expenses tax deductible? For most of us, the answer is going to be no. However, I’ve learned that some gardening and landscape expenses could be tax deductible under certain circumstances like if you are selling your home or you own a home based business. As with all tax questions, you should speak with a tax professional to discuss your specific situation and possible deductions.
So what are the circumstances that qualify for a deduction? To answer this, I’ll first say that not all gardens are the same. If you’re like me, your garden is a simple vegetable garden. I keep all my produce to help feed my family of eight. I don’t grow food professionally (i.e. I’m not a farmer). I don’t donate my produce to food banks because I don’t grow that much. So, for me, the garden is just for personal use, and therefore, the expenses of the garden are not tax deductible.
Not All Gardens Are Equal
There are some caveats and circumstances that may qualify your garden for a tax deduction. For instance, anyone that donates food to a local food bank could earn a tax deduction.
While many vegetable gardens are harvested and consumed by a single family, there are some who have larger gardens. With a large vegetable garden, you may be growing and harvesting more than you can consume, so you choose to donate the remainder to the food bank.
Be sure to get a tax form for your donation, and you will be able to use that on your taxes. As far as vegetable gardens go, this is the only tax deduction I know of, and it isn’t really a deduction for your expenses as much as a deduction for your donations.
However, because there are some caveats and circumstances that may allow you to claim tax deductions, you need to keep a good record of all expenses and all income from your garden. This will make it much easier for you and/or your licensed tax professional to determine if your garden qualifies for any deductions.
Farm vs. Garden
Farmers have a completely different set of tax deductions which begs the question – are you a farmer or a gardener? The answer to this question is quite simple really. Most of us are considered hobby gardeners – we have a “backyard” type of garden that doesn’t require much heavy equipment or multiple employees.
Farmers grow food over large areas of land for the sole purpose of selling the produce to make a living. They typically have many acres of land which are used only for growing, and they also typically have HUGE expenses for heavy machinery that helps with planting, growing, and harvesting their crop.
Many farmers also employ workers to help with the planting, maintaining, harvesting, and distribution of their crops as well. Due to the large expenses involved with farming, there tend to be additional deductions available.
Most of us don’t use heavy machinery and don’t employ workers to assist with our crops, and therefore, we are not classified as farmers. That doesn’t mean you don’t take any produce to the market, and it doesn’t mean you don’t try to earn a little income from your crops – it simply means that the scale at which you operate isn’t considered farming by the IRS.
If you think you may qualify for farming deductions, you should discuss your operation with a licensed tax professional.
Lawn and Garden Deductions for Home Based Businesses
In certain circumstances, if you operate a business out of your home you may be able to claim a portion of your lawn and garden on your taxes. Due to the nature of some home based businesses, you may require that clients visit your home regularly. If this is the case, you may be able to deduct some small portion of your regular lawn and garden expenses on your taxes.
To some small degree, you may be able to claim that the outside appearance of your business has an effect on the success of your business, and therefore, you are forced to maintain a lawn and garden that otherwise wouldn’t be necessary. This could put your lawn and garden in the classification of a tax deductible business expense.
Essentially your lawn and garden are an advertisement and the appearance of your business. If you were leasing a commercial location there would likely be landscapers hired by your business to maintain the businesses outside appearance.
The same is true for your home based business – particularly if your home based business is a landscaping company. In this circumstance, you may use your own lawn and garden as an advertisement to your clients, and that may be a business expense. While this likely does not include your backyard vegetable garden, it could likely cover some percentage of your flower garden and lawn care.
Garden Deductions When Selling Your Home
Finally, if you are selling or have recently sold your home, you may be able to claim a portion of your garden and landscaping as “curb appeal” or “necessary repairs” on your taxes. A home’s value has much to do with the way it looks from the outside.
Homes that are in need of upgrades and repairs may qualify for tax deductions based on the additional expenses that were required to sell the home. This landscaping deduction also goes so far to include things like a sprinkler system and building a walkway.
What garden produce can I donate to the food bank?
Each food bank or food pantry is a little different because they are run by private organizations. That means that they all have different needs.
While most food banks will accept any food you give to them, it may be a good idea to call around to find out the needs of each food bank before you decide where to donate your harvest. Many backyard vegetable gardeners are in it for the hobby and like to give back to the community by providing healthy food for those in need.
Be sure to build a relationship with a few different food banks. If you’re intent is to grow a garden specifically to give your harvest away, then you may be interested in finding out their needs before you even plant your garden.
If your intent is to grow food for your own family, you should plant what would best help your family and then consider donating the remainder to a food bank.
How do I calculate my donation to the food bank for taxes?
The IRS does grant an income tax deduction for qualifying food donations. Be careful about which organization you donate to – some organizations are not listed with the IRS to receive these donations and therefore if you give to them your donation would not be qualified. Also, be sure to get a receipt from the organization documenting the amount you’ve donated.
The amount of the deduction is determined by the FMV or Fair Market Value of the food at the time of the contribution. Also, keep in mind that this is only necessary if you will be itemizing your deductions instead of taking the standard deduction.
For many of us, the standard deduction is more than the itemized deduction would be, so it may not be worth itemizing. However, it’s always still a good practice to get the donation receipts and keep good records just in case itemizing turns out to be worth more than the standard deduction.
I typically take the standard deduction, but I always calculate the itemized deduction first just to see if it’s worth it – twice in the past ten years it’s been worth it, but usually, the standard deduction gives me the greatest return (this will depend on your income and your specific circumstances).