Retirement Plans for Landscaping Business Owners: Solo 401(k), SEP, and Crew Considerations

Landscaping business owners tend to reinvest profits into equipment rather than retirement accounts. The truck payment, the new mower, and next season’s supplies take priority. But the tax benefit of retirement contributions is larger than most landscaping owners realize: a $30,000 contribution to a Solo 401(k) can save $7,200 in federal income tax at the 24% bracket (it doesn’t reduce self-employment tax), and the contribution grows tax-deferred. Because landscaping isn’t an SSTB, the QBI deduction further reduces the tax bill.

What plan should a solo landscaper use?

A landscaper who works alone or with only a spouse has the most flexibility:

What about seasonal crew?

Many landscaping companies hire seasonal employees (April through October) who don’t meet the retirement plan eligibility requirements. Under most plans, employees must work at least 1,000 hours in a year and have completed one year of service. Seasonal crew members who work fewer than 1,000 hours are excluded from the plan.

A landscaping company that hires seasonal workers for 6 months (approximately 1,040 hours) will have employees who meet the eligibility threshold. If the same workers return the next season, they have completed one year of service and are eligible for the plan in their second season.

The Safe Harbor 401(k) with a one-year service requirement excludes first-season employees, which reduces the employer cost in the early years of the plan. By the time returning crew members become eligible, the owner can evaluate whether the plan costs are manageable.

How does the equipment UBIA help?

At higher income levels (above $191,950 single / $383,900 MFJ), the QBI deduction is limited to the greater of 50% of W-2 wages or 25% of W-2 wages plus 2.5% of the unadjusted basis immediately after acquisition (UBIA) of qualified property.

Landscaping companies have significant UBIA from equipment. A company with a $55,000 truck, $25,000 in mowers, and a $10,000 trailer has $90,000 in UBIA. The 2.5% UBIA component adds $2,250 to the limitation, which can support an additional $2,250 in QBI deduction, saving approximately $540-$833 in income tax depending on the bracket.

For companies with multiple trucks and heavy equipment ($200,000+ in UBIA), the UBIA component becomes meaningful: 2.5% of $200,000 = $5,000, supporting an additional $5,000 in QBI deduction.

Related guides:

• Landscaping Crew Classification Employee Contractor
• Landscaping Entity Structure Scorp
• Landscaping Equipment Financing Section 179
• Landscaping Estimated Taxes Seasonal Income
• Landscaping Snow Removal Add On

When do landscapers have to deposit crew 401(k) deferrals?

Deferrals withheld from crew paychecks become plan money as soon as they can reasonably be separated from the company’s funds. The outer limit for a 401(k) is the 15th business day of the following month, but a plan with fewer than 100 participants gets a safe harbor if the deposit lands within 7 business days.

Your own side runs on a looser clock. An employer profit-sharing contribution to a 401(k), or a SEP contribution, is due by the business’s return due date with extensions. For a 2025 sole proprietor who files Form 4868, that’s October 15, 2026. If you’ve elected S corporation status, it follows the S corp return instead.

• A solo landscaper with no crew who missed December can adopt a Solo 401(k) after year-end and make 2025 deferrals until April 15, 2026.
• If you pick a SIMPLE IRA instead, it has to be effective by October 1, and crew deferrals are due no later than 30 days after the end of the month.

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