Landscaping Business: LLC vs. S-Corp, Tax Structure, and QBI Deduction

By Yarik Yarosh, CPA ·September 5, 2026 ·5 min read

Written by Yarik Yarosh, CPA (US & Canada) September 5, 2026 · FL CPA license AC61704 · CPA Ontario

Landscaping and lawn care is one of the most common trade businesses in the US, with a straightforward tax profile. The business isn’t a Specified Service Trade or Business (SSTB) under IRC 199A, meaning the full 20% QBI deduction applies at all income levels. For a solo operator, equipment costs are moderate: a commercial mower ($5,000-$15,000), trailer ($3,000-$8,000), trimmer/blower package ($1,000-$3,000), and a truck ($20,000-$50,000). The economics shift dramatically when employees enter the picture: labor becomes the largest cost (30-50% of revenue), workers’ comp insurance kicks in, and payroll taxes add another 7.65% on top of wages. This makes the S-Corp break-even and entity analysis more nuanced than for a pure solo operation.

✓Key takeaway

Landscaping tax profile:

SSTB classification: NOT an SSTB

Landscaping, lawn maintenance, and hardscaping are trade services
Full QBI deduction at all income levels
No phase-out above $266,950 (single) / $533,900 (MFJ)

Revenue model (solo operator):

Weekly mowing residential: $35-$75/visit
Seasonal mowing contract (30 weeks): $1,050-$2,250/customer
Leaf cleanup (fall): $150-$400/job
Mulching: $50-$80/yard installed
Hedge/shrub trimming: $50-$200/visit
Spring/fall cleanup: $200-$500/job
Average annual revenue per weekly customer: $1,500-$3,000
Typical solo capacity: 20-30 weekly mowing accounts

Revenue model (crew-based):

Same services at higher volume
Hardscaping (patios, retaining walls): $2,000-$20,000/project
Irrigation installation: $2,000-$8,000/project
Landscape design/installation: $3,000-$25,000/project
Average annual revenue per crew: $150,000-$250,000

Cost structure (solo vs. crew):

Cost Category	Solo (% of revenue)	With 2 employees
Labor (employees)	0%	30-40%
Fuel	8-12%	5-8%
Equipment maintenance	3-5%	3-5%
Insurance (GL + auto)	3-5%	5-8%
Workers’ comp	0%	3-5%
Materials (mulch, plants)	5-10%	10-20%
Net margin	50-65%	20-35%

Major investments:

Equipment	Cost	Section 179
Truck (F-150/F-250)	$20,000-$50,000	Yes (over 6,000 lbs for F-250+)
Open/enclosed trailer	$3,000-$12,000	Yes
Zero-turn mower (commercial)	$5,000-$15,000	Yes
Stand-on mower	$7,000-$12,000	Yes
Walk-behind mower	$2,000-$6,000	Yes
Trimmer/edger set	$500-$1,500	Yes
Backpack blower	$400-$800	Yes
Aerator	$2,000-$5,000	Yes
Dethatcher	$1,000-$3,000	Yes
Total solo setup	$35,000-$90,000

S-Corp analysis (solo operator):

S-Corp break-even: approximately $65,000-$75,000 in net profit
At $100,000 net: S-Corp saves approximately $3,000-$4,000/year
Reasonable salary: $30,000-$45,000 (based on employed landscaper wages in your market)

S-Corp analysis (crew-based, $300,000 revenue):

With 2 employees and $100,000 in net profit: S-Corp saves $4,000-$5,500/year
Reasonable salary: $40,000-$60,000 (owner-operator managing crews)
The compliance cost ($2,500-$3,500) is easier to absorb at higher revenue

How should a landscaping business be structured for taxes?

Hypothetical example

Round numbers. A solo lawn care operator. Year 2. Single filer. 25 weekly mowing accounts plus seasonal services.

Revenue: $95,000

Weekly mowing (25 customers x 30 weeks x $55 avg): $41,250
Mulching (50 jobs x $300 avg): $15,000
Spring cleanup (25 jobs x $350): $8,750
Fall cleanup/leaf removal (25 jobs x $400): $10,000
Hedge trimming (40 jobs x $125): $5,000
Aeration/overseeding (20 jobs x $250): $5,000
Miscellaneous: $10,000

Expenses: $25,000

Fuel: $6,000
Equipment maintenance: $3,000
Insurance (GL + auto): $3,500
Mulch/materials: $5,000
Phone/software: $1,500
Marketing: $2,000
Blade sharpening/consumables: $1,000
Truck maintenance: $2,000
Miscellaneous: $1,000

Net profit: $70,000

Sole proprietorship:

SE tax: $70,000 x 92.35% x 15.3% = $9,889
QBI: $70,000 x 20% = $14,000
Taxable: $70,000 - $4,945 - $15,000 - $14,000 = $36,055
Income tax: $4,076
Total: $13,965
Effective rate: 19.9%

S-Corp ($35,000 salary):

FICA: $35,000 x 15.3% = $5,355
QBI: $35,000 x 20% = $7,000
Taxable: $70,000 - $15,000 - $7,000 = $48,000
Income tax: $5,505
S-Corp costs: $2,200
Total: $13,060
Effective rate: 18.7%

S-Corp saves: $905/year. Marginal at $70,000.

At $100,000 net: Sole prop: $21,800 S-Corp ($40,000 salary): $18,400 S-Corp saves: $3,400. Worth it.

The employee decision (biggest financial fork): A solo landscaper netting $70,000 considers hiring one employee at $35,000/year.

Additional costs beyond salary:

Employer FICA: $35,000 x 7.65% = $2,678
Workers’ comp (NCCI 0042, landscaping): $35,000 x 4-6% = $1,400-$2,100
Additional insurance: $500-$1,000
Additional equipment (second trimmer, blower): $1,500
Total cost of one employee: $41,078-$42,278

Revenue increase needed to break even: $42,000

If the employee enables taking on 15 more weekly accounts ($55 x 30 weeks = $24,750) plus proportional seasonal work ($15,000), total additional revenue = $39,750. That’s barely break-even.

The employee becomes profitable at 20+ additional accounts. Most landscapers add employees too early (at 25 accounts) when they should wait until they’re turning away work (at 35+ accounts for a solo operator).

Route density matters for taxes: A landscaper with 25 accounts in one neighborhood drives 15 miles/day. A landscaper with 25 accounts spread across the metro drives 60 miles/day.

The difference at 70 cents/mile:

Dense route: $0.70 x 15 miles x 180 days = $1,890
Spread route: $0.70 x 60 miles x 180 days = $7,560

Dense routing increases net profit by $5,670 (more taxable income), but the cash savings are much larger because fuel, time, and vehicle wear are all reduced. This is an example where a higher tax bill means a better business.

Illustrative numbers only, not a real client and not advice for your facts.

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Cite this page

Yarik Yarosh, CPA. "Landscaping Business: LLC vs. S-Corp, Tax Structure, and QBI Deduction." Blue Cloud CPA, September 5, 2026. https://bluecloudcpa.com/guides/landscaping-lawn-care-entity-structure-scorp

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.