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What not to do as a cannabis business with taxes

On: January 31, 2020

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With the marijuana industry still in its infancy, there has never been a better time to start your own cannabis business. However, making sure that you know what you need to do with your taxes and keeping your business lawful requires a lot of work that you’ll have to do all on your own. Plus, with an everchanging list of rules to follow, you’ll probably be following tax code changes every year until your business comes to a close. What should I not do as a cannabis business? One of the most important habits and systems you will need to pick up is record keeping.  The state and federal tax agencies you’ll be paying to will require sound and solid record-keeping, including invoices, receipts and more if you want to keep your business up and running. Not keeping ahold of all your records could not only get your licenses revoked but could get you jail time and hefty fines if you end up unknowingly breaking the law. Having the appropriate records means that filing will be a lot easier than if you are unprepared.  You’ll have to pay four times a year, and if you miss or ignore those deadlines then you will not only be fined but could lose your business. For those who end up missing, the IRS alone will add a 5 percent per month penalty that will continue to increase until the return is filed. If you do not pay your taxes, the IRS will hit you with 6 percent interest, plus a late payment penalty of .5% each month after the April deadline. Another tip for keeping things easy is to avoid mixing all your finances by having separate accounts for your personal and work life.  What should I do for my cannabis business One of the things that will make your life run much more efficiently will be a bookkeeper.  An accountant not only makes sure that everything is up to par and runs the books but having a specific person who knows the ins and outs of the tax process will set you on the right path to success. If not, making sure that you have the right systems in place to own and operate a cannabis business will keep the books clean and the government off your back. Keeping up to date on all the changes that are going on in the cannabis industry will also make sure that you are prepared. Due to cannabis’ status in California and America (and the fact that it is always changing), things may change for your business in the blink of an eye.  It is also important to make sure that you are constantly operating within the law and within any regulations or codes. Cannabis businesses are tricky as marijuana is still deemed an illegal drug at the federal level, which can complicate any tax or regulatory practices that you may encounter as a business. At the end of the day, keeping track of your cannabis business can be a piece of cake if you stay on top of things. Always make sure to call Leading Tax Group and don’t attempt to do it yourself.
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