Cannabis tax preparation is a process that’s often overlooked by cannabis company operators. However, it’s important to understand the tax laws of selling cannabis products in order to minimize your tax burden.
While accounting software can help in some cases, cannabis-specific tax professionals understand how to navigate local laws and handle cannabis taxes appropriately.
From knowing which business-related expenses are applicable to maintaining your books all the way through tax season, Northstar’s expert record keeping and knowledge of the industry ensures business owners are always prepared.
Cannabis is a complex world, and knowing how to avoid penalties is essential for every business operating in cannabis. Choosing Northstar’s cannabis CPA services means you’ll have someone knowledgeable about the highly regulated marijuana industry and related taxes.
At Northstar, we provide specialized cannabis tax preparation and other financial services. Our team is ready to provide the support your operation needs with tax advice, tax return analysis, chart of accounts management, and more.
Book a free consultation to discover how we handle cannabis-specific tax returns and help cannabis companies navigate tax season with expert insight into local licensing rules and the internal revenue code.
What Does Tax Preparation for a Cannabis Business Involve?
A cannabis tax preparation guide could give you the insight you need to understand the basics. But knowing how to handle a tax return for the cannabis industry means understanding more than how to work the cost of goods sold into the mix.
Tax returns for a cannabis dispensary or another business working with this controlled substance mean understanding how critical it is to maintain records. Sole proprietors have enough to worry about; keeping track of expenses and maintaining a chart of accounts in preparation for taxes is a full-time job in and of itself.
Deductions don’t come easy and the IRS keeps a watchful eye on the money cannabis operations bring in. Not to mention, the same expenses that allow a traditional business to make a deduction don’t apply to a cannabis dispensary or other operation deriving income from marijuana sales.
Contrary to what traditional businesses experience with their taxes, regulations demand cannabis business operators adhere to specific rules and ban them from taking advantage of the same deductions. Even typical business expenses like employees become more difficult to deduct with IRS section 280E’s restrictions.
Our cannabis clients know the value in keeping track of their costs, revenue, income, and other information that comes in handy while filing taxes. With proper money records, marijuana businesses pay less in taxes and can deduct some expenses.
Whether you need a licensed CPA to track your expenses, prepare your taxes, or calculate your revenue minus your costs, Northstar is ready to help! Schedule your consultation now to learn all about how our full-service CPA firm will scale your cannabis operations with cannabis accounting and responsible advice.
Is Tax Preparation for the Cannabis Industry Important?
Many businesses try filing their own taxes. They calculate their expenses, but they don’t know the difference between what they pay and what’s actually their responsibility.
It’s crucial to remain compliant while filing taxes. However, there are ways to ensure you don’t have to pay taxes on some of your income.
Business owners need a clear path to success, and while inventory management is something you can handle, filing taxes to ensure your income doesn’t suffer is something a professional should handle.
While total legalization will happen in one form or another, maintaining accounting records remains essential. The rules are stacked against cannabis businesses and their employees. However, knowing which income is taxable, what form to submit for extensions, and other tax-related information allows these operations to avoid costly penalties and remain in business.
However, with Northstar’s support, business owners remain prepared for an audit. We understand the essential nature of accounting records, even as the legal marijuana space remains prohibited at the federal level.
Avoiding back taxes with clear records keeps marijuana-specific businesses operating successfully.
Operating a business in the cannabis industry? Book your consultation and get the support your operation needs today!
Does Federal Law Let Cannabis Businesses to Make Deductions?
While various IRS rules and regulations impact the industry’s ability to make deductions, some are still allowed. Knowing what’s deductible is crucial to ensuring all sales remain as profitable as possible.
Through Section 280E, the IRS focuses on businesses operating in cannabis. The code was put in place in the early 1980s and forbids businesses from writing off business expenses if they’re involved in selling or distributing Schedule I or Schedule II controlled substances.
Many standard business expenses aren’t allowed for those in the marijuana industry. However, some ways to get around Section 280E exist. Deductions that minimize one’s tax liability are easier when you understand the law.
At Northstar, our accounting professionals know this industry and are ready to help you navigate it. Keep your tax dollars in your wallet with expert tax prep from our CPAs and book your consultation today.
Benefits Cannabis Businesses Experience Using Northstar for Tax Prep
At Northstar, we know all about the unique challenges those in the industry face. This is why we emphasize compliance with the IRS’s rules.
Our guidance gives cannabis operators the bandwidth to scale as we navigate the space’s complex financial landscape. Business owners have more time to dedicate to their activities as we incorporate data to guide their successes.
At Northstar, we stay on top of marijuana regulations without subjecting cannabis business owners to the liabilities of handling their own tax prep. Learn how we’ll support your company’s operations by booking your consultation today.
Northstar’s Cannabis Tax Preparation Service Model
Fractional Cannabis Tax Preparation
Our outsourced CFO model focuses on compliance with state regulations and laws that might affect your business. These fractional efforts offer your company access to the professional help it needs to scale with flexibility that supports all stages of your operations.
Scale access to this assistance as your company increases its profits. In some cases, you might find business is slow; this is where our aid truly shines. Scale back our relationship to give your operation the influx of capital it needs to thrive through the lull.
At Northstar, we grow cannabis companies with their needs in mind. We keep our interactions flexible because we know this contributes to our clients’ long-term successes.
Looking for expert cannabis tax prep focused on your success? Book your consultation with Northstar to get started today!
Bypass Cannabis Tax Issues with Northstar
Northstar’s cost accounting keeps you compliant with the IRS tax code. Our firm has decades of combined experience guiding the legal cannabis industry!
At Northstar, our expert cannabis accountant insights remain accessible to those operating in this budding space. Our understanding of all nuances associated with state and federal legislation guarantees you never need to worry about audits or back taxes.
Looking for certified public accountants that specialize in the cannabis industry? Book your consultation now to learn more about how we’ll scale your operation with proper records and data insights.
Getting Started with Northstar
For those in need of cannabis tax preparation assistance, Northstar is ready to help! We know what your business must do to stay compliant. From calculating the cost of goods sold and excise tax liability to ensuring all sales are tracked, we’re here to navigate the cannabis industry on your behalf!
Book your consultation now to worry less and earn more with Northstar. We’re eager to get started!
