TAX PREPARATION and PLANNING

With proper tax planning, a business owner can prepare and adapt to their tax liability, rather than merely reacting to it. New businesses should be prepared for at least a 15% tax debt, for even the smallest amount of income, and up to 40% or higher depending on which state tax jurisdiction you are in. Tax planning not only enables you to prepare financially – and emotionally – for your tax liability, but also to work proactively with your advisor to reduce your tax burden; through strategically timing expenditures, optimizing entity structure, or implementing appropriate cost categorization techniques.

Nowhere is planning more important than for companies in the cannabis industry. Since IRC § 280E disallows the deduction of overhead expenses, cannabis business owners can easily find themselves in a negative cash position while still facing large tax burdens. Strategic tax planning can reduce the impact of IRC § 280E and substantially increase the profitability of cannabis operations. While this is vital for all cannabis businesses, it’s most important for dispensaries, which face the least flexible interpretation of cost of goods sold. The Calyx team specializes in cannabis taxation and can guide you through these complexities to ensure your company is doing all it can to minimize its tax burden.