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Cannabis Individual Tax Filings

If you think you are good to go with your taxes, let us do a check-up to see if we can file an amended return to get you back some of the money you spent on taxes. An example of something we find that most generalist CPAs didn’t take advantage of for their cannabis clients in 2020 is the change to depreciation from the CARES Act. Here’s how it works: If you had major capital expenditures (which 99% of cannabis businesses do), then you could depreciate the value to $0 immediately and reduce your taxable income, ultimately reducing your tax bill. There are many ways we can help recapture value for you and your cannabis business. Please reach out to us if you are interested in this service. Also, know that we don’t just prepare taxes. We have an entire suite of services that we offer for cannabis businesses from monthly CFO service all the way to helping take your company public if that’s your goal.

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Tax Services for Individuals

As the cannabis industry continues to transform from being in the shadows to a viable mainstream business, more and more people are looking for guidance on cannabis business tax filings, cannabis CoGS and many other aspects of financial compliance for cannabis businesses. In September 2020, the IRS released a set of documents that could be helpful for cannabis business owners. There was nothing incredibly earth-shattering about the info, but it did help clear the air on some matters that weren’t explicitly stated in other places. GreenGrowth CPAs not only file your company’s taxes, but we also offer cannabis tax preparation services and filing for individuals within the company. 

For cannabis tax services for individuals, we:

  • Use the above-the-line charitable deduction The CARES Act authorizes an above-the-line deduction of up to $300 for monetary contributions made by a non-itemizer in 2020 ($600 for a married couple). Also, for 2020, the CARES Act raises the deduction limit on monetary contributions to 100% of adjusted gross income (AGI).
  • Maximize the 20% deduction for Qualified Business Income (QBI)The Tax Cuts and Jobs Act (TCJA) introduced a new provision (Section 199A) that allows certain taxpayers to generally deduct 20% of qualified business income on their tax return. Business income from pass-through entities such as sole proprietorships, partnerships, LLCs, and S Corps may qualify for this new deduction.
  • Supercharge your investment with opportunity zones Opportunity zones are one of the most powerful incentives ever offered by Congress for investing in specific geographic areas.

In certain scenarios, not only can you potentially defer paying tax on gains invested in an opportunity zone until as late as 2026, but you only recognize 90% of the gain if you hold the investment for five years.

  • Make annual exclusion gifts Every taxpayer may give up to $15,000 per year to an unlimited number of individuals free of gift tax. Giving property to heirs in a lower income tax bracket during the donor’s lifetime is one way to realize income tax savings.
  • Higher Education Expenses When appropriate, pay qualified expenses for next semester by the end of this year. Generally, the costs will be eligible for a credit or deduction in 2020, even if the semester does not begin until 2021.

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