Streamlining operations and establishing a brand are ideal practices for any company. But managing a cannabis business while maintaining compliance are crucial aspects of working in this industry.
For day-to-day operations, Apex Trading saves cannabusiness operators hours and helps them stay organized. Between managing orders, clients, and inventory, this software makes a world of difference in the way cannabusinesses function.
Since strict regulations and costly infractions characterize this industry, pairing Apex Trading’s powerful software with a cannabis accounting team is the best way to ensure total compliance. Here are some ways a cannabis accountant contributes to keeping cannabis business operators compliant.
Maximizing Allowable Deductions with a Cannabis CPA
Apex Trading is excellent for tracking cannabis business operations. However, even with this software in place, with 280E and 471, the right cannabis CPA will maximize your deductions.
During tax season, effective bookkeeping practices from throughout the year plays a role in determining allowable deductions. Since cannabis companies are more challenging to navigate, an accountant will guide you to ensure your business is on track from an accounting standpoint.
Administering Taxes (Other Than Income Tax) with an Accountant
Regulatory laws for cannabis differ from state to state. With federal legalization still in the process, the federal, state, and local levels of cannabis taxation make handling taxation challenging.
The cannabis industry is still premature and lacks a federal system for tax revenue calculation across its entirety. Thus, cannabusiness operators need a way to determine their taxation at the federal, state, and local levels.
While some operators decide to conduct the research on their own, it’s challenging to learn the local regulations AND stay up to date on them. The following is what every cannabis business operator should know to compliantly administer their taxes on their own:
- The medical and/or recreational use legalization status for your state,
- The applicability of excise taxes at the state level,
- The applicability of sales taxes at the state level,
- The applicability of cultivation tax,
- Whether the state has a Controlled Substance or Stamp Tax, and
- Whether the Federal Code Section 280E applies for state income tax purposes
Even though some states have already legalized cannabis in some way, many still lack a system for taxing these products. Regardless, anyone operating in cannabis needs to know which taxes they’ll need to pay in accordance with their operations. And this is where a cannabis accounting team will help.
“We handle tax administration on behalf of our clients by creating an individualized tax schedule,” says Lorenzo, cannabis CPA at Northstar Financial Consulting Group. “This helps us track each tax owed and when the taxes are due, ensuring complete tax compliance across the local, state, and federal levels.”
This type of schedule also tracks the amounts and dates while incorporating a tax flow budget. This helps cannabis business operators ensure they have the resources and capital to fulfill their tax obligations. In turn, these business owners pay their taxes on time and avoid penalties.
Fully Understanding Entity Options with a Cannabis CPA
Since there’s no single tax rate for businesses operating in the U.S., the chosen business entity structure directly impacts each cannabis business operator’s tax rate. This comes into play even more so with the overall tax expense of additional federal and state regulations in place.
Thus, a complete tax analysis allows an assessment of the business’s goals, as well as its growth path. However, a cannabis CPA knows that the right entity structure goes beyond business assessments and tracking potential growth.
A cannabis accountant will use entity structuring to manage risk, contribute to investor and funding strategies, and several other implications. Of course, this helps with taxation and accounting essentials, as well. But the benefits of these other implications make choosing the right entity structuring crucial for success.
Closing on Using Apex Trading with a Cannabis Accounting Team
Apex Trading is perfect for handling a wide assortment of compliance-related tasks while managing your cannabis business. Processing orders, operating a customizable storefront, managing customer relationships, creating sales and inventory reports, and more are simplified with this software.
Combining powerful Apex Trading software with an expert cannabis accounting team will enable you to maintain your compliance. Software is for everything that can be automated and monitored for analysis; a team of expert cannabis CPAs will take that data and pair it with legal knowledge to maintain compliance.
If you have any questions about how Apex Trading can help your business, feel free to reach out or request a demo here.
Louis Levey – Content Success Manager, No Strings Content