Did you know a company called Trulieve received $113 million in 280e tax refunds? The company was doing its due diligence and applying what the IRC 280e code recommends to cannabis owners. 

Receiving that amount of refunds means, you need to know how to navigate the tax complexities and look for opportunities for growth to get the most money back into your business.

The journey to embark on the tax adventure isn’t easy, but finding worthy experts offering tax services helps your business stay on track and scale further in the industry. 

This guide is about how cannabis tax services help your business by manuvering through regulations, minimizing tax liabilities, and looking for tax strategies for growth. 

Tax Problems Cannabis Businesses Face

Cannabis businesses face tax problems mainly due to the high taxation procedures that many need to abide by. If you have a cannabis business, you need to pay more taxes than traditional businesses.

You’re taxed on more products you sell, with excise tax taking place, and you must track your inventory to ensure you record it to tax authorities, come tax season. 

There are also other problems many businesses in the industry, like yourself, deal with, such as not being able to deduct normal business expenses. 

If you deduct expenses you’re not supposed to deduct, this can lead to unnecessary fines and other consequences. 

Aside from these problems, there’s the challenge of financial solutions to support cannabis companies that lead them to operate in cash-only transactions. This makes it harder to track, and record all necessary tax information, especially when you record finances to tax authorities. 

You also need to keep everything, in order, to prepare for a tax audit since those come every once in a while to ensure your business is operating appropriately. 

Though these problems seem to outweigh the positive outlook of the cannabis industry, there is a way around the tax issues that can grow your business to new heights just like Trulieve. 

How To Beat The Tax Game In The Cannabis Industry 

Taxes can overrun you if you don’t know how to do them while abiding by strict regulations. Knowing how to record, track, and keep your taxes in check is important to grow your business

How to do it?

Nothing is better than working with an expert cannabis accountant providing cannabis tax services due to their extensive knowledge of the industry that allows them to serve cannabis owners. 

Factors To Consider When Choosing Cannabis Tax Services 

You can also do the necessary work of taxes yourself if an accountant isn’t what you need right now. But we advise against it since it’s hard enough to operate a business, let alone manage your taxes and finances, on top of it. 

Steps To Start Doing Taxes Yourself

1. Start Separating Business And Personal Finances

Start separating your personal and business finances to stay organized. When you have separate bank accounts and credit cards for personal and business use, you can map out your taxes for accurate record-keeping. 

2. Choose The Right Business Structure

Also, you should choose the right business structure to benefit from taxes. Your business structure affects how you file taxes and your liability. The most common business structures are sole proprietorship, partnership, limited liability company (LLC), and S corporation or C corporation.  

3. Understand Your Tax Obligations

Different types of cannabis businesses have unique tax obligations that you need to consider including income tax, sales tax, excise tax, and employment taxes. 

Here’s a breakdown of the tax obligations:

Understanding these can help you determine what you need to record and track in your business, all while remaining compliant. 

4. Keep Detailed Records:

You need to get an accurate record-keeping system to adhere to strict regulations and avoid possible fines. 

It’s best to keep track of all business-related expenses, including:

Once you keep track of these records, your business operates better and minimizes risks. 

5. Familiarize Yourself With 280E

It’s best to get familiar with IRC 280e since the code prohibits businesses involved in the trafficking of controlled substances, including cannabis, from deducting most normal business expenses. 

When you have a deeper understanding of 280e, you can make better choices about the expenses you can deduct. This makes accurate record-keeping even more crucial for cannabis businesses.

6. Consider Tax Deductions

While 280E limits what deductions cannabis businesses can claim, there are still some deductions you can take advantage of:

7. Prepare And File Taxes

As a cannabis business owner, it’s recommended to work with a tax professional, especially one with experience in the cannabis industry. 

Here’s a basic guide to preparing and filing your taxes

This can help you file taxes yearly that’s ideal for staying compliant in the cannabis industry. 

How Getting Tax Services Launches Your Business Forward

Finding the right tax services for your cannabis business is something you should consider if you’re not already. Tax services can give you time back into your business since you’re not worrying about taxes and finances that go with it. 

Tax services from an accountant can grow your business since they look for opportunities for growth and offer the best course of action. 

Cannabis accountants can also identify areas where your business can get more money back and conduct cash management strategies. 

This can help your business in many ways, but let’s dive into the benefits of using cannabis tax services. 

Benefits Of Using Cannabis Tax Services 

There are many benefits of using cannabis tax services that we mentioned briefly above. However, we didn’t explain it in greater detail. 

Here are some benefits of using cannabis tax services: 

These are some of the benefits your cannabis business receives when working or using cannabis tax services. 

Importance Of Keeping Your Taxes On Track In The Cannabis Industry

It’s important to keep your taxes on track in the cannabis industry to minimize any risks that your company may receive. 

If your taxes aren’t done right, it can lead to other consequences, leading to higher expenses in your business. 

Cannabis tax services help you stay on track and adhere to all regulatory standards set forth by regulators. 

Choosing The Right Cannabis Tax Services

To choose the right cannabis tax services, you need to know what your business needs. 

What are your business goals? And will hiring an accountant for tax services help you accomplish them? 

These are important questions to know if you need someone to help manage your taxes and look for hidden opportunities. 

You should also research the tax services individually and see if the accounting experts can help you by contacting them directly. 

From there you should opt into a consultation to review your options and understand your business. 

This is why we at Green Space Accounting offer a free consultation for cannabis businesses looking to handle their taxes the right way. 

We deliver on our promises and offer other financial services to grow your business. Our accounting firm has been in the industry for several years and we continue to work to exceed expectations. 

Book a call with us, for 30 minutes, and we can start mapping out your taxes.