What expenses can a cleaning business deduct?
Cleaning businesses have plenty of deductible expenses, but the key is actually tracking them throughout the year. Most fall into a few main categories.
Supplies and materials make up a significant chunk of operating costs. Cleaning solutions, disinfectants, paper products, trash bags, microfiber cloths, mops, brooms, gloves, and spray bottles all count. Every trip to the supply store or online order for work materials is deductible. Keep receipts or use a dedicated card so nothing gets lost.
Equipment like vacuums, carpet cleaners, floor buffers, pressure washers, and steam cleaners can be expensed or depreciated depending on cost. Items under $2,500 can typically be written off in the year purchased. Larger equipment may qualify for Section 179 deduction, letting you deduct the full amount instead of spreading it over several years.
Vehicle expenses are often the biggest deduction for cleaning services. You’re driving to multiple job sites every day. Track your mileage and choose between the standard mileage rate or actual expenses like gas, insurance, maintenance, and depreciation. The standard rate is simpler but actual expenses sometimes save more, especially if you drive an older vehicle that’s fully depreciated.
Insurance premiums for general liability, bonding, and workers’ comp are fully deductible. Many cleaning businesses carry bonds to reassure clients about working in their homes or offices. That’s a business expense.
Labor costs including wages, payroll taxes, and subcontractor payments reduce your taxable income. If you 1099 subcontractors, make sure you’re issuing those forms correctly.
Marketing and advertising covers your website, business cards, flyers, online ads, and vehicle wraps. Uniforms with your company logo count as advertising too, not personal clothing.
Phone and software get overlooked but add up. The business portion of your cell phone, scheduling software, invoicing apps, and customer management tools are all deductible. Home office deduction applies if you have a dedicated space for admin work.
Professional services including bookkeeping and accounting fees are deductible operating expenses.
Commonly missed deductions include mileage between job sites (not just to the first client of the day), laundry costs for washing work uniforms and rags, small purchases from dollar stores for supplies, background check fees for employees, and key copies or lockboxes for client access.
The problem most cleaning business owners run into is not tracking these throughout the year. You remember the vacuum purchase but forget the $50 in spray bottles and $30 in trash bags from three separate store runs. By tax time, those small purchases are impossible to reconstruct.
Working with bookkeeping services in American Fork helps capture everything. Monthly expense reviews catch what you’d otherwise miss and often save more than the cost of the service itself.
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More Questions
How do I handle retainage in my bookkeeping?
Track retainage separately from regular receivables using a dedicated retainage receivable account. Record the full revenue when you bill but split the receivable between what you can collect now and what's being held back.
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Full-service bookkeeping covers transaction categorization, bank and credit card reconciliation, and monthly financial statements. You get clean books without doing the work yourself.
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Assign every expense to a specific job at the time it happens using cost codes that match how you estimate. Track labor, materials, and subcontractor costs separately by phase, then compare budget to actual weekly.
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Utah County has a range of bookkeeping options from solo practitioners to specialized firms. The best fit depends on your business type and whether you need industry-specific expertise like job costing for construction.
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Use classes in QuickBooks to tag each transaction as either service or installation work. This lets you run segment reports showing revenue, costs, and profit margins separately for each type of work.
Read answerWhat training do I need for QuickBooks?
It depends on your role and what you'll handle in QuickBooks. Business owners reviewing reports need an hour of learning. Those entering transactions and reconciling accounts need 3-5 hours of focused training on the fundamentals.
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