If you run a clothing store or restaurant, you and your accountant would have no problem figuring out what kinds of taxes you need to pay and how much. There are a lot of rules, but you also get a lot of deduction options to reduce your final bill.<\/p>\n\n\n\n
But cannabis business owners live in a murkier place, at least until the IRS finally released some guidance to help them out. After all, their product is still illegal at the federal level, despite being a thriving and legal business model in 37 states<\/a>, the District of Columbia, and three territories.<\/p>\n\n\n\n The cannabis industry has several unique financial concerns from the inability to get bank accounts to the large number of cash transactions. These challenges mean the IRS has to count on a high level of voluntary compliance by owners to make sure those tax responsibilities are met. The recent guidance<\/a> is part of an education effort to help them understand the rules.<\/p>\n\n\n\n Let\u2019s take a look at what the IRS had to say about taxes for the cannabis industry.<\/p>\n\n\n\n While selling and growing marijuana is illegal at the federal level, you still make income from it, and income from any source \u2014 including illegal ones \u2014 is taxable. The courts have consistently ruled that\u2019s the case and that dispensaries in states where cannabis is legal have taxable income<\/a>.<\/p>\n\n\n\n Not only are you responsible for income taxes, but you also need to keep up with your federal employment taxes. This includes self-employed taxes for you as needed and payroll taxes<\/a> for your employees.<\/p>\n\n\n\n Traditionally, cannabis businesses tend to be pretty cash-heavy, which is further complicated by the reluctance of some banks to work with the marijuana industry. That is starting to change, but if you find yourself in a situation where you can\u2019t just write a check to cover your tax bill, cash is acceptable.<\/p>\n\n\n\n To do that, you need to call 30 to 60 days in advance to schedule an appointment<\/a> at an office that can accept your payment. The IRS requests you bundle the money in the highest denominations possible. Plan to be there for an hour or two depending on how much you\u2019re paying and how many types of taxes you have.<\/p>\n\n\nYes – You Have To Pay Income Taxes<\/h2>\n\n\n\n
Yes – You Can Make Tax Payments In Cash<\/h2>\n\n\n\n