How many of you are using accountants that know how to properly do 280e cost accounting?
Gladly - new to the site and not trying to ruffle feathers. If that is the best method and if you or @chrisj don’t mind letting me know how to do what you suggested I can do that. That said, if this is a grower’s forum and any of you are licensed, interested in being licensed, or you will home grow the state permitted number of plants AND you want to know how to make money while avoiding giving most of it to the government - this should be of interest to you too.
Welcome to GN. What exactly is 280E accounting, can you tell us more?
Thank you @chrisj Nice to be here! 280e is a section of the tax code that prohibits any tax deductions for anyone or business engaged in the sale of any controlled substance. The history has it that in 1981 a convicted cocaine dealer decided to file taxes and deducted ordinary business expenses. The following year congress responded by enacting 280e… That said, an earlier case had already established that IRS can only tax income and not gross receipts - gross receipts are whatever you collect from you customer and income is gross receipts minus what it cost you to make the product (or service) you sold to the customer - this is know as cost of goods sold (COGS)… So 280e cost accounting is about tracking, calculating, and documenting anything that could be cost of goods sold (seeds, soil, nutrients, labor, rent, machinery, etc.) so that you can lower your income and get taxed on less AND so you can be prepared if IRS should ever decide to audit you or your company… Hope that explains it and wasn’t too long…
We help with license applications, cost accounting, among other things: mbagrowthpartners.com/cannabis-business-services
Anyone interested can set up time with me at: Calendly - Mack Audena