From Quarters to Clarity: Tax-Smart Laundromat Success Starts Here

"Life is like laundry. You have to sort it out before you can clean it."— Anonymous

Running a laundromat is more than loads of laundry—it's a full-on business, and how you handle real estate taxes, leasehold improvements, and depreciation can mean the difference between squeaky clean profits and costly surprises.

Whether you own the building or lease the space, there are powerful tax tools you can use to reduce what you owe and maximize what you keep.

Let’s break down the key strategies every laundromat owner should know.

Why Real Estate Taxes & Leasehold Improvements Matter

Behind every machine and clean towel is a space—plumbed, powered, and paid for. Understanding how to properly categorize and deduct leasehold improvements and property costs is essential to growing a profitable laundromat business.

Smart Leasehold Improvements That Pay Off

When leasing your laundromat space, you’re often responsible for the buildout. Good news: much of that is deductible over time!

Common deductible improvements:

• Plumbing systems and drainage

• Electrical work for heavy-duty machines

• Interior walls and counters

• Lighting and HVAC systems

• Signage, both interior and exterior

• Flooring and tiling

  
  

These are considered capital improvements, so they’re typically depreciated over time—but some can qualify for Section 179 or bonus depreciation for faster write-offs.

Pro Tip: Ask your contractor for an itemized breakdown—separating HVAC, plumbing, flooring, etc.—to make it easier to claim the right deductions.

Writing Off Your Signage

Signage = visibility. And yes, it’s tax-deductible.

Indoor signage (like service menus or decals) that's affixed may be depreciated like leasehold improvements.Outdoor signage (like lighted signs or awnings) can be depreciated over 15 years—or written off faster if classified as personal property.

Smart strategy: Classify signage as personal property when possible for quicker deductions.

Depreciation 101: Buildings vs. Improvements

If you own the building your laundromat operates in, you have two separate assets to depreciate: the building and the improvements.

Depreciating the Building

• Depreciated over 39 years using straight-line depreciation

• Only the building’s value (not the land) is eligible

Example:Bought property for $1M (building value = $800K) →Annual depreciation ≈ $20,513

Depreciating Qualified Improvements (QIP)

• Non-structural, interior improvements

• Eligible for bonus depreciation (60% in 2025)

Includes:✔️ Electrical and plumbing✔️ Drop ceilings and drywall✔️ Interior doors and lighting

Advanced Tax Tools for Property Owners

If you own your building, you have access to even more tax-saving strategies.

Section 179 Deduction

• Write off qualifying improvements (HVAC, alarm systems, etc.) immediately

• 2025 cap: $1,220,000, phases out after $3,050,000 in purchases

  
  

Bonus Depreciation

• 60% in 2025 (phasing out unless extended by Congress)

• Great for used equipment and interior upgrades

  
  

Cost Segregation Study

Breaks down your property into shorter depreciation timelines:

• 5 years: Washers, dryers, furniture

• 7 years: Fixtures

• 15 years: Sidewalks, fencing, landscaping

  
  

Example payoff:Cost segregation on a $1M property could unlock $100K–$300K in first-year deductions.

How to Handle Real Estate Taxes Like a Pro

If You Own the Property:

• Deduct property taxes paid to local/state governments

• Can’t deduct improvements or assessments that increase value (e.g., new sidewalks)

If You Lease the Property:

In triple-net leases, you may be paying the landlord’s property taxes. These can often be deducted as:

• Part of rental expense, or

• A direct tax deduction (depends on your lease structure)

Tip: Review your lease with your accountant to ensure you're not missing valuable deductions.

Don’t Get Caught in the TIA Tax Trap

What’s a Tenant Improvement Allowance (TIA)?

It’s money or credit from your landlord to help fund your space’s buildout.

Here’s how it can affect your taxes:

Scenario A: Landlord Owns Improvements

• You don’t report income

• Landlord handles depreciation✅ Best-case scenario

  
  

Scenario B: You Own Improvements

• You must report the allowance as income

• You depreciate the improvements over time🚫 Higher upfront taxes, slower benefits

Best practice: Negotiate for the landlord to own and manage the improvements when possible.

Work With a Tax Pro Who Knows Laundromats

Running a laundromat is a grind—but your tax strategy shouldn’t be.From lease negotiations to cost segregation, a seasoned advisor can help you:

• Structure improvements for max deductions

• Accelerate depreciation where possible

• Document everything for IRS audit readiness

  
  

Let’s Talk Strategy—We’ll Handle the Tax Spin Cycle

At Reliable Tax Relief, we help laundromat owners keep more of every quarter they earn. Whether you're expanding, remodeling, or planning for next year, we’ll build a personalized tax game plan that works as hard as you do.

📅 Schedule Your Free Consultation Today Let’s rinse out the IRS—together.