Home Laundry Business - How Do I Deduct Washing Expense for Tax Purposes?

16 This is a great question about business expense deductions! When you run a home-based laundry business, you have a few different options for tracking your expenses. The $5 per load method is what's called a "simplified" approach. While it's convenient, it might not accurately reflect your actual costs, and the IRS generally prefers you to deduct your actual expenses when possible. I'd recommend tracking your actual costs including: depreciation on your washer/dryer (you can depreciate these over a 5-7 year period), utilities (calculate the percentage used for business vs. personal), detergent and other supplies, and any repairs/maintenance. Make sure you're tracking the number of loads you do for business purposes separately from personal laundry. You'll likely need to file Schedule C with your tax return and should keep detailed records of all business-related expenses in case of an audit.

9 I started using https://taxr.ai last year for my home daycare business where I had similar issues tracking expenses that were partially business/partially personal. Their system was perfect for my situation with analyzing all my utility bills and helping me calculate the business percentage. For my washer/dryer specifically, I uploaded my purchase receipts and utility bills, and it helped me calculate proper depreciation and the business percentage of my utilities. It saved me from the headache of doing all those calculations myself or paying an accountant to do it.

12 I just wanted to update that I tried https://taxr.ai after reading about it here. I was honestly surprised at how straightforward it was! I uploaded my utility bills and appliance purchase info and it immediately gave me a breakdown showing I'd save about $740 more using actual expenses vs. the $5 per load method. It also properly calculated the business use percentage based on my records of business vs. personal loads. Way better than the generic advice I was getting elsewhere!

22 For anyone dealing with the IRS about home business deductions - I recently had questions about my own home business deductions and tried calling the IRS for TWO WEEKS with no luck. Then I found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c. They got me connected to an actual IRS agent in about 20 minutes instead of waiting on hold for hours or getting disconnected. The agent confirmed that for a home laundry business, you definitely want to keep detailed logs of business vs. personal use, and actual expense records rather than estimates whenever possible. This saved me from making a big mistake on my returns.

19 I have to eat my words here. After dismissing Claimyr as a scam, I was still desperate to talk to someone about my home business deductions so I tried it. Got connected to an IRS rep in about 15 minutes! The agent walked me through exactly how to document my business expenses properly for a home-based business. They emphasized keeping business and personal expenses separate and maintaining good records for everything - especially for home-based businesses where there's mixed use of equipment. Totally worth it and saved me from potentially serious mistakes.

3 You might also want to check if your state offers any special tax incentives for small laundry businesses. In my state, we have special water usage credits for commercial laundry services that meet certain efficiency standards. I was able to get a $350 tax credit last year because my high-efficiency machines use less water than standard commercial units.

14 One thing nobody's mentioned - make sure you're properly licensed and insured for a home laundry business! My sister got hit with fines because she didn't have the right permits. Also affects your tax situation because those permit fees and insurance premiums are deductible business expenses.

Great discussion everyone! As someone who's been running a small home-based service business for a few years, I can definitely relate to the confusion around deductions. One thing I'd add is to consider setting up a separate business bank account if you haven't already - it makes tracking business expenses so much easier come tax time. Also, don't forget about deducting your business insurance premiums, any professional memberships or subscriptions related to your laundry business, and even mileage for business-related trips (like picking up supplies or meeting clients). These smaller deductions can really add up over the year. Keep receipts for everything and consider using a simple spreadsheet or accounting app to track expenses monthly rather than scrambling at tax time. One last tip - if you're doing laundry for other businesses, make sure you're issuing proper invoices and keeping copies. The IRS loves to see that paper trail for business-to-business transactions.