Spring is nearly upon us, which means it’s nearly tax time. Every year, the financial landscape shifts its tax implications on small and medium businesses (SMBs) — convenience stores, gas stations, and the like. This becomes an annual game every business owner is forced to play, most of whom are too busy keeping shelves stocked and pumps flowing to sit and learn nuanced tax codes.
Here’s the good news: It doesn’t have to be this way. With a bit of careful research, proactive business thinking, and the right tools, COAM-operating businesses can play (and win) the tax game. Today, we’re going to explore four tax prep tips for small businesses to save more money and file stress-free this season.
Deduct What You Can
Tax deductions are one of the most powerful ways for convenience stores and gas stations to regain financial control during tax season. Effectively, deductions level the playing field by allowing SMBs to subtract all “ordinary and necessary” business expenses from their taxable income. In practice, this helps to ensure that all costs are fully reflected in your income before the government taxes you — not just the obvious ones (ex., cost of goods sold, salaries). Brands earning any portion of their revenue via coin-operated-amusement machines (COAMs) can expand their tax shield in countless, valuable ways — only if they keep track of deductions all the time.
That’s where the Titan Redemption System comes into play. Designed uniquely for convenience stores and gas stations with coin-op games, Titan acts as your full-time gaming accountant. It automatically tracks and logs every COAM transaction, game activity, and associated cost under one unified platform.
Maximizing Your Depreciation Shield
Countless deductions are commonly approved by the IRS, one of the biggest being depreciation. When you depreciate a physical asset, like your COAM machines, you’re subtracting some of its value from your taxable income each year — over time, this makes depreciation a powerful tax deduction for SMBs with coin-op games. Given that COAMs are highly capital-intensive investments, you’re eligible to depreciate them accordingly,
With Titan’s granular tracking features, you can optimize your depreciation accounting using methods like:
- Straight-line depreciation to evenly spread out each machine’s cost over its usable life
- Section 179 deduction to deduct your entire COAM purchase price in year one — forgoing all future benefits
- Double declining balance depreciation to accelerate early-year deductions, which is when your COAMs will likely generate the most revenue
- Units of production depreciation based on actual games played (i.e., usage) relative to expected lifetime usage
COAM Marketing & Ads
In addition to physical asset depreciation, conventional marketing is another big area where COAM operators can find unique tax relief. From a business and tax perspective, marketing is just another ordinary and necessary expense for COAM-enabled businesses — and thus, entirely deductible.
Some common COAM-marketing expenses for SMBs to consider include:
- Physical media (flyers, posters, etc.)
- Social media ad-spend
- Signage and branding on the machines themselves
- Sponsoring events/tournaments for your COAMs
- Promotional giveaways like coupons or prize drawings
On this front, Titan seamlessly tracks all your COAM promotional costs on autopilot — over time, across channels, compiling it all into detailed tax-ready reports. Never let a potential marketing deduction slip through the cracks.
Plan Ahead, Avoid Surprises
Proactive planning is fundamental to smooth tax filing. Keeping an organized system to manage all your records can go a long way in maximizing tax savings. This is because messy records create surprises during tax season — especially sales tax surprises! To mitigate that risk and stay on top of your books, start systemizing your records and bookkeeping processes and building out reliable workflows to keep track of everything that matters.
This is particularly impactful for SMBs with coin-op games since such transactions and redemptions can create a chaotic web of numbers that’s hard to untangle.
Since Titan already logs and archives all of your COAM activity, why not put it to use in the plan? All that data can seamlessly be integrated within Titan’s customizable dashboards. These offer real-time visibility into key facets of your tax-filing process — gaming throughput, depreciation schedules, revenue versus cost, marketing spending, and more. Better yet, all of this can be sliced and diced as you see fit, segmented across stores, games, and over time. Come tax season, Titan’s detailed records make it easy to claim all valid COAM deductions.
By staying on top of your finances year-round, you’ll avoid the last-minute scramble that every tax season is known for while maximizing your deductions.
Wrapping Up
Taxes will never go away, which is exactly why every SMB should start this process now: learning to play and win the tax game. We explored various tax-code tips and caveats that can enable your company to minimize your tax bill. For now, start by identifying any potential deductions or tax credits your business could claim. Over time, explore and implement formal software to automate your books, and be diligent about planning for tax season all year round.
Here at Inamax, we prioritize your peace of mind during tax season. Understanding the tax code and all its complexities can be overwhelming, especially for busy business owners. That’s why our comprehensive Titan System was tailor-made for COAM operators of all kinds.
Let Titan fly your games on autopilot — you focus on running your business.