Tax Deductions Its Smart To Be Aggressive, Just Dont Over Do It

Tax breaks are not just for the rich, like some politicians claim. We can get some too. During their first few years of operation, coin and card laundry operators are able to claim all of that wonderful depreciation to protect their incomes from the IRS. Then there comes a time when the depreciation is gone and operators have to face the potential tax music, especially if and when they sell their business. In the years between, it''s a struggle to find every single legal, or close to legal deduction possible. The following are some suggestions you may not yet have considered, or perhaps might have overlooked in the past. The first suggestion is that laundry owners be tax aggressive about small things. Take every deduction you can, even if they are very small ones. Eventually, these small deductions add up, and if one or two are turned down later in an audit, you haven''t put much at risk. You can deduct costs of travel to some coin laundry related events, such as a CLA seminar. For an example, going to the Clean Show this June can be fully deductible. Imagine that, a trip to Las Vegas that you can take off of your income taxes. Even though you take your wife and kids along and spend an extra day or two on the road, you could still aggressively deduct your expenses, because you reasonably believe that all of your travel costs on such a trip should be considered as a legitimate business expense. Even your wife and kids work in and around the laundry. Who can say they don''t? Not the IRS. Of course you should keep receipts for the meeting registration, travel, hotels bills and perhaps a meeting handout or two to prove you actually attended the event and took part. If you deduct tokens, slugs or phony bills you''ve gotten, it may bend tax rules. Yet, you''re entitled to something back. It''s too small an amount for the tax guys to argue over. During one audit, an operator brought in a quart jar of slugs as proof. It was allowed. Do you belong to service clubs, or are you active in your community''s affairs? You can claim dues and donations to church, school and civic groups as justified as a means of promoting your coin laundry and to bring in more business. These are such small amounts, that most operators don''t even keep track, but over the course of a year, they add up. What about the leftover clothing that has been forgotten by customers. All laundries will end up with a few such loads each year. Most operators either dump the clothes, use them for rags or give them to the Salvation Army, Hospice or some other tax deductible group. These garments have value and are an opportunity for a deduction. Get a receipt for what you estimate it would cost to replace the clothes. Use that receipt to save a little on your tax bill. It might not be completely kosher, but auditors who know little of the business won''t deny the deduction. Be aggressive. Don''t forget that any city business license or permit fees you have to pay for is just as deductible as your rent, insurance, gas and electric bills. Keep track of refunds you have to make so that these may be deducted too. While this won''t seem to add up to much for a good laundry, it does add up over the year. Keep out of order cards as proof. Some operators claim mileage for travel to and from their laundry. This works best if the business is out of the way of the direct route between your home and regular job. In the case of mileage, it''s almost a requirement to maintain a log to record mileage driven for business. When you need to make runs specifically to get parts or supplies, it should be deductible as well. Add that mileage up over the course of a year and deduct it. It could end up saving you a lot on your taxes. Some laundry operators purchase almost everything they buy through their business and deduct almost everything they could buy as a business expense, even though some items might end up being for home use. Paint, tools, cleaning supplies, paper towels and T.P. being typical deductions. Was the paint for your kid''s bedroom or was it for painting the customer area of your laundry? How can an auditor tell which it was? Were the light bulbs for the laundry lavatory or your bathroom? In dealing with taxes, it''s always smart to get professional advice. Check with your tax advisor about each step you take, but let them know that you want to be aggressive about not having to pay taxes. One operator the News talked with offered us this good advice. ''It''s OK to be aggressive about taking deductions, as long as you don''t get greedy. If what you claim makes sense and it is reasonable, you won''t attract an audit. If any of it seems to be out of balance, you can expect to get a call from the tax people soon.'' Be aggressive, but don''t get too greedy is a motto that seems like good advice to follow. But always check with your tax advisor first.