The legal landscape of cannabis has changed dramatically in recent years, but the federal government still doesn’t allow businesses to deduct expenses or claim tax credits. Because of this complex situation, many small business owners are turning to professional bookkeepers for help with their taxes. The good news is that all you have to do is appoint a Cannabis bookkeeping accountant.
Growing marijuana is legal but not straightforward.
If you’re considering growing marijuana, you should know that regulations vary by state. Each state has its laws governing cannabis production, cultivation, and sales. Even in states where it is legal to grow and sell marijuana, many local governments have additional rules or restrictions on these activities.
And while the federal government doesn’t explicitly forbid the cultivation of cannabis by individuals, they do classify marijuana as a controlled substance, which means that federal law enforcement agencies can still enforce federal laws regulating the possession and sale of cannabis products within your state.
So what does this all mean for the average grower? It means that your business has to follow many rules! You will need to:
- pay taxes at both national and state levels;
- maintain good records;
- pay worker’s compensation premiums for workers injured on the job;
- keep hazardous waste disposal records;
- follow environmental protection rules set forth by your city or county;
- file all necessary forms with your city hall (and possibly other agencies);
- adhere to local zoning ordinances regarding the distance between buildings and property lines;
- get proper licenses from any number of agencies depending on what type of operation you run.
Complex tax code and different state regulations.
For many cannabis business owners, the information about taxes can be overwhelming. However, Cannabis bookkeeping accountants and professionals specialize in helping cannabis businesses stay compliant and profitable with their accounting and bookkeeping needs.
Accountants are good at keeping track of expenses for your business and ensuring that you’re spending money in a way that will keep you from being audited. They help you find ways to reduce taxes on your cannabis dispensary’s gross profits while maintaining profitability.
Unresolved issues at the federal level.
There are still a few unresolved issues at the federal level, so cannabis businesses need to be extra careful. This means that cannabis businesses need to keep detailed records of all transactions and financial transactions. These records must be kept for six years from the filing date or three years after an audit if an audit was done during this time.
Keeping good records of expenses helps a business stay profitable.
A good bookkeeper can ensure that your business stays profitable by keeping accurate records of all expenses and income. Regular bookkeeping is also a way to maintain transparency in the industry, which in turn helps you prove what you earn and spend to potential investors, partners, or lenders. If you don’t keep good records, you may have trouble proving how much money came in or how much went out and why.
The complicated legal landscape and considerable tax burdens.
The legal landscape for cannabis businesses is complicated and ever-changing. The tax burden is also huge and growing. There are many things to keep track of, both on your end and as a professional. You could try to do it all yourself, but that will take up much of your time and energy, not to mention tax dollars.
If you’re considering starting a cannabis business, it’s essential to know that a Cannabis bookkeeping accountant is not a one-size-fits-all affair. It would be best if you had someone who understands the unique accounting needs of cannabis businesses.
