Cleaning businesses can deduct supplies, mileage, insurance, and many other costs from their taxes. Most solo cleaning business owners pay 15 to 30 percent of their profits in taxes. This guide covers tax basics, common deductions, quarterly payments, and when to hire an accountant.
What Are the Tax Basics for Cleaning Businesses?
Every cleaning business must pay taxes. How much you owe depends on your business type and income.
Understanding taxes saves you money. Many cleaners pay more than they need to because they miss easy deductions.
Types of Taxes You May Owe
Here are the main taxes that affect cleaning business owners:
- Federal income tax — you pay this on your business profits each year
- Self-employment tax — covers Social Security and Medicare at 15.3 percent
- State income tax — most states charge this, but rates vary
- Sales tax — some states charge sales tax on cleaning services
- Payroll taxes — applies if you have employees
How Your Business Structure Affects Taxes
Sole owners report business income on their personal tax return. You use Schedule C to list your income and expenses.
A limited liability company can choose how it is taxed. Most small cleaning businesses file as a sole owner or an S corporation. An S corporation can lower your self-employment tax.
Talk to a tax professional to pick the best option. The right structure can save you thousands each year. Learn more in our startup guide.
What Tax Deductions Can Cleaning Businesses Claim?
A deduction lowers the amount of income you pay taxes on. The more deductions you claim, the less tax you owe.
Cleaning Supplies and Products
Every product you buy for your business is a deduction. This includes sprays, wipes, trash bags, gloves, and sponges.
Buy supplies in bulk to save money. Keep every receipt. Even small purchases add up over the year.
Equipment and Tools
Vacuums, mops, buckets, ladders, and carpet cleaners are all deductible. Items over $2,500 may need to be spread over several years.
Items under $2,500 can usually be deducted in full the year you buy them.
Vehicle and Mileage
Driving to client homes is a business expense. You have two ways to deduct it:
- Standard mileage rate — deduct 70 cents per mile driven for business
- Actual expenses — deduct gas, repairs, insurance, and other car costs based on business use
Most cleaners use the standard mileage rate because it is simpler. Track your miles every day with an app or notebook.
Say you drive 50 miles a day for work. That adds up to about 12,500 miles per year. At 70 cents per mile, that is an $8,750 deduction.
Insurance
Business insurance is fully deductible. This includes general liability, bonding, and workers' compensation if you have employees.
If you are self-employed, you may also deduct health insurance for yourself and your family. Read our insurance guide for more details.
Marketing and Advertising
Everything you spend to get clients is deductible. This includes:
- Business cards and flyers
- Website costs — hosting, domain name, and design
- Online ads — Google Ads, Facebook Ads, and other paid platforms
- Listing fees — Thumbtack, Yelp, and similar sites
Phone and Internet
If you use your phone for business, you can deduct the business portion. Most cleaners deduct 50 to 75 percent of their phone bill.
The same rule applies to your internet bill. Deduct the portion you use for business.
Software and Subscriptions
Cleaning business software, accounting tools, and scheduling apps are deductible. Even small monthly fees count.
Check out our software comparison guide to find the best tools for your business.
Home Office
Do you run your business from home? You may deduct part of your rent or mortgage. You can also deduct electric and water bills.
The simple method gives you $5 per square foot of office space. You can claim up to 300 square feet. That is up to $1,500 per year.
Full Deductions List
| Expense | Typical Cost Per Year |
|---|---|
| Cleaning supplies and products | $500 to $2,000 |
| Equipment (vacuums, mops, tools) | $200 to $1,500 |
| Vehicle mileage | $3,000 to $10,000 |
| Insurance (general liability) | $500 to $1,200 |
| Phone and internet | $600 to $1,200 |
| Marketing and advertising | $200 to $2,000 |
| Software and subscriptions | $100 to $600 |
| Home office | $500 to $1,500 |
| Uniforms and work clothes | $100 to $400 |
| Training and education | $100 to $500 |
How Do You Track Business Expenses?
Good records save you money at tax time. They also protect you if you ever get audited.
Keep Every Receipt
Save receipts for every business purchase. Take a photo with your phone right away. Paper receipts fade over time.
Store digital receipts in a folder on your phone or computer. Label them by month so they are easy to find.
Use a Separate Bank Account
Open a bank account just for your business. Put all business income in this account. Pay all business expenses from it.
This makes it easy to see your total income and expenses. It also keeps things clear if you get audited.
Track Mileage Daily
Write down your miles every day. Note where you drove and why. Free apps can track your miles for you automatically.
Do not wait until tax season to figure out your mileage. By then you will have forgotten most of your trips.
Use Simple Accounting Software
Free tools like Wave or low-cost tools like QuickBooks make tracking easy. They connect to your bank account and sort your expenses for you.
Even a simple spreadsheet works. The key is to update it every week, not once a year.
How Do You Pay Quarterly Taxes?
When you work for yourself, no employer takes taxes from your pay. You must pay taxes four times a year.
Who Needs to Pay Quarterly
You must pay quarterly if you expect to owe $1,000 or more. Most owners earning over $10,000 per year need to pay quarterly.
When Payments Are Due
Quarterly tax payments are due four times a year:
- April 15 — for income earned January through March
- June 15 — for income earned April through May
- September 15 — for income earned June through August
- January 15 — for income earned September through December
How to Figure Out Your Payment
Estimate your total yearly income. Subtract your deductions. Then multiply by your tax rate.
A safe rule is to set aside 25 to 30 percent of your net income. Divide that by four for your quarterly payment.
Missing a quarterly payment can lead to a penalty. Set a reminder on your calendar two weeks before each due date. Pay on time every time.
How to Pay
Pay online through the Internal Revenue Service website. You can also mail a check with Form 1040-ES. Most states have their own payment website too.
Online payment is the fastest and safest method. You get a confirmation right away.
What Changes With Taxes When You Have Employees?
Hiring help changes your tax duties. You have extra forms to file and extra taxes to pay.
Employees Versus Independent Contractors
An employee works on your schedule with your tools. A contractor works on their own schedule with their own tools.
You must withhold taxes from employee paychecks. You do not withhold taxes for contractors. Misclassifying workers can lead to big fines.
Payroll Taxes You Must Pay
As an employer, you pay half of your employee's Social Security and Medicare taxes. That is 7.65 percent of their wages. You also pay federal and state unemployment taxes.
Use payroll software to handle the math and filings. It costs $20 to $50 per month and saves hours of work.
Filing Requirements
You must give each employee a W-2 form by January 31 each year. Give each contractor a 1099 form if you paid them $600 or more.
File these forms on time. Late filings come with penalties. Learn more about hiring in our hiring guide.
When Should You Hire an Accountant?
You can handle your own taxes when starting out. But there comes a point when an expert is worth the cost.
Signs You Need Help
Consider hiring an accountant if:
- You earn more than $50,000 per year — the tax savings usually outweigh the cost
- You have employees — payroll taxes and filings get complicated
- You want to change your business structure — an accountant can advise on the best option
- You got a notice from the tax agency — let a professional handle it
What an Accountant Costs
A tax preparer for a small cleaning business costs $200 to $500 per year. A full-service accountant who handles bookkeeping costs $100 to $300 per month.
A good accountant often saves you more than they charge. They find deductions you miss and keep you out of trouble.
How to Find a Good One
Ask other small business owners for a recommendation. Look for someone who works with service businesses. Make sure they are a licensed professional.
Meet with two or three before you decide. Ask about their fees, their experience, and how they communicate.