Eli5: In the TV show Ozark, Marty uses falsified expenses to launder money. But how would expenses help you to keep money that you earned illegally?

Question

I get how you could buy a business and inflate your revenue in order to launder money you acquired illegally, but why would falsely inflated operational costs help you?

In: Other

Answer 1

Because it allows you to keep more of your falsified income. Otherwise youd have to pay a ton in taxes.

Ie you declared 100k of illegal income using a front. Since the front doesnt actually do anything you have to pay taxes based off 100k of income which might be 30% or something. Now if you also falsified 100k of operating expenses you would have a tax liability of 0, meaning you keep the entire 100k.