This is the final blog in a series of posts discussing Section 280E of the federal tax code and how cannabis business owners can reduce their tax liability, taken from the recent MJ Platform webinar “280E and Tax Season” featuring Brian Cadieux, President of Cadieux and Associates, a Denver-based bookkeeping and tax preparation services firm.
As we shared throughout our blog series about Section 280E, state-legal cannabis business owners need to understand the tax code and plan accordingly. That means owners need to determine what type of proprietorship makes the most sense for them, know the important tax dates based on how they decide to structure their business, and keep their books up-to-date with contemporaneous bookkeeping. As we have seen time and time again, businesses that take the time to strategically plan for tax time are the ones that will survive and grow.
In the final blog of this series, we will discuss how MJ Platform provides business owners with the tools they need to gain financial visibility so that they are able to plan for and reduce their cannabis business tax. When it comes to tax time, for example, MJ Platform makes compliance easy for business owners by keeping track of sales, inventory, and cash through our integrations with QuickBooks and ERP software solutions like Sage Intacct.
Let’s take a deeper dive into how each of these integrations can help businesses improve their cannabis accounting:
MJ Platform’s Integration with QuickBooks
With the integration of QuickBooks, sales and inventory transactions, purchase orders, adjustments and discounts are seamlessly exported from MJ Platform’s Retail module to QuickBooks. As a result, business owners are able to manage and organize their financial records so they are prepared for tax season. A few of the key benefits include: mapping of transactions to 20 different QuickBooks sub-accounts; “cost of goods sold” adjustments for orders that are “weight heavy” to ensure accurate tracking; exporting only financial data so that patient information is safe and secure in HIPAA compliant servers; and QuickBooks add-on only exports total dollar value of the transaction and not individual transaction so businesses are HIPAA compliant.
MJ Platform’s Integration with Sage Intacct
Sage Intacct is a cloud accounting software solution that enables business owners to track finances at a more granular level. As mentioned in our blog 5 Things You Need to Know About Cannabis Accounting Software, having an accounting software solution that provides the “right” data is important, especially in the event of an audit. Sage Intacct provides business owners with a much-needed accounting resource, as it is the only cloud-based software that provides HIPAA compliant audit trails so business owners can justify every expense.
For those who are looking to scale their business, I recommend they look into integrating an enterprise resource planning (ERP) software solution that integrates with a seed-to-sale solution like the MJ Platform. Cannabis business owners who wish to grow their operations need to utilize both types of solutions. MJ Platform is the only cannabis-specific, Generation 2 software, and coupled with an ERP solution, it enables business owners to optimize all facets of their operation to provide improved compliance and greater visibility into their business.
The bottom line is that state-legal cannabis business owners need to take the time to prepare and organize their financial records before tax time – and to be compliant, they need to do this throughout the year. With the right tools and resources, keeping track of financial records can be a seamless process.
For more information on resources to help you prepare for tax season, view our recent “280E and Tax Season” webinar, featuring Brian Cadieux of Cadieux and Associates, a Denver-based bookkeeping and tax preparation services firm. The webinar provides tips for cannabis business owners and accountants about how best to structure a cannabis business and manage expenses to reduce their tax liability.
Click here for the full tax guide.
Disclaimer: The opinions expressed in this blog post are those of the author. They do not purport to reflect the opinions or views of Akerna or its family of companies. The information contained in this post is provided for informational purposes only and should not be construed as tax advice on any subject matter. You should not act or refrain from acting on the basis of any content included in this post without seeking tax or other professional advice.
