Cannabis CPA goes beyond tax prep and filing. We help you meet your financial and business goals while staying compliant with the complex tax and general business regulations faced by companies in your industry. In fact, we want to partner with you in all the financial aspects of your operation or, in other words, we’re here to create a joint business endeavor that helps you grow and succeed.
Toward that end, our large and small cannabis business tax planning services are focused not solely on taxes, but also on a range of tasks that include tax prep and planning. We help cannabis firms set up their business structures — that is, choosing whether to operate as a sole proprietorship, C-Corporation, S-Corporation or an LLC on the basis of taxation considerations. Then, because typical business deductions are not allowed for controlled substances, we set up the business’s accounting and bookkeeping systems in a way that captures expenses included in cost of goods sold (COGS), which are allowed.
In a recent update, U.S. Code § 471 now allows cannabis companies to reduce the impact of U.S. Code § 280E by allowing businesses with a three-year average of under $25M in gross receipts to calculate COGS for taxes in the same way it calculates COGS for financial accounting. This means that more expenses are acceptable as COGS, which lessens the taxable income for cannabis companies. We thoroughly understand § 471 and we will determine if you should take advantage of this provision by weighing the benefits and risks of using this regulation vs. § 280E.