Tax Planning For CANNABIS INVESTORS
The cannabis industry faces some specific tax rules both on federal and state levels. Most entrepreneurs are interested to know which expenses they can deduct from their business federal income tax. Under normal circumstances, a business can deduct all its usual and ordinary business expenses incurred in the same year, but for the cannabis industry the IRS only allows the deduction of cost of goods sold for federal income tax. The consequence of this restriction is a higher tax liability.
Before selecting an entity type, we help cannabis business owners create a tax plan to minimize the tax consequences of the deductions limited to cost of goods sold as well as stay in compliance with regulations. The ideal options to keep you both informed and ready to take decisions will be a combination of accounting and financial statements preparation.