As the 2024 tax season approaches, cannabis businesses are urged to embrace a forward-thinking and collaborative approach to tax season preparation. Communication and discussions are key. Leading the charge is 420 CPA, a reputable firm in the cannabis industry since 2009, specializing in tax management.
Be sure to see our comprehensive list of federal tax filing deadlines here:
Federal Tax Filing Deadlines for 2024
Charting a Strategic Course for 2024 Tax Readiness
To simplify the tax filing process, reduce stress for you and for your CPA firm, and ensure timely submissions, 420 CPA advocates for early preparation. Generally, our office will require three weeks prior to the deadline to ensure timely filing prior to tax deadlines. This is to allow for enough time to confirm that all documents needed are received, your books are ready for tax preparation, and to have a meaningful meeting with our clients in order to determine appropriate tax positions are taken and that our clients can prepare for any tax liability for the tax year.
In these meetings, we’ll discuss risks and opportunities with the various tax positions (including 471(c) – 280E as well as opportunities you may have with real estate or other business ventures that are related to your cannabis operations).
We don’t believe that a tax return is simply an administrative process. A meaningful conversation is key to guaranteeing the best outcome for taxpayers. Additionally, we’ll have time to plan for the upcoming year and design appropriately to make any planning moves that are needed. Both a retroactive and a proactive conversation is key for attaining your best outcome in order to safeguard one of your most valuable assets- your cash.
Specifics: the Nitty Gritty of Preparedness
Our team will begin requesting specific documents and access from our cannabis tax clients and their adjacent businesses. Be sure your books and records are fully reconciled – including all cash, credit cards, and loan accounts. Of course, if you need our assistance in tax-readiness with regards to your books, you can turn over to our team as is, and we’ll be sure to have our accounting staff get them ready for us in order to prepare your tax return as accurately as possible.
Here is a quick check list that is not fully comprehensive, but may give you an idea of what you need to start having ready for the tax year(s) we’re discussing.
- Cash logs
- Bank and credit card statements
- Accounting software backup file or online access
- Filed State Sales Tax and Excise Taxes
- W2’s and W3’s
- 1099’s Filed by your company
- Sales Reports from your POS or ERP
- Cost of Goods Sold Reports from your POS or ERP
- Ending inventory cost value reporting
- Appropriate 280E allocation worksheets
- Tax documents received (example – 1099DIV’s, 1099INT’s, etc)
- Loan documents
- Updated and executed agreements
- Changes in business form, addresses, or responsible parties
- Updated contact information
Collaborating with experienced tax professionals and utilizing cutting-edge software allows businesses to conduct a thorough review of financials, positioning themselves favorably as the IRS kicks off the season.
Proactive Planning: Guiding Through the Dynamic 2024 Tax Landscape
We believe that our partnership with clients includes being proactive in planning your success. In our experience, in this industry, many folks are working on a reactionary basis. It’s time that we change that dynamic in order to ensure the success of business owners and the industry as a whole. Never forget that looking forward and planning is key to your success.
Part of proactive planning includes discussing your options in planning your federal and state tax (and potentially international) strategy for the current upcoming years.
Important preparation for planning includes having projections, goals, and an exit strategy and plans (if applicable). Be ready to discuss these in your planning call.
Based on projections and current financial goals for you and your company or companies we will discuss strategies for tax savings in light of current and future anticipated legislation at the federal, state, and local levels- including outlining potential positive and negative outcomes of each strategy.
With a dynamic tax season on the horizon, businesses are advised to stay ahead of the curve. This involves delving into industry-specific tax implications, maximizing available tax credits and deductions, and staying compliant with evolving regulations.
The Corporate Transparency Act
Reminder to all that there are new FINCEN guidelines for reporting on new companies formed in 2024. You may want to ensure that this information is gathered alongside your tax information so that this can be done as an additional scope of work.
Read our article here: FinCEN’s Corporate Transparency Act Has Arrived
Adhering to Critical Deadlines
Calendars should be marked with business-specific tax deadlines, with a keen understanding of their implications for sound financial planning.
420 CPA recognizes both the challenges and also the opportunities inherent in the tax season. Through a comprehensive array of updates and tips, the aim is to provide businesses with clarity and ease as they embark on their 2024 tax filing journey.
Proactive planning, the judicious use of tools and resources, and seeking expert advice remain pivotal for a successful and stress-free tax season. 420 CPA stand ready to assist businesses in achieving compliance, optimization, and peace of mind throughout the 2024 tax season.
Explore tailored tax services designed to meet unique needs of cannabis entrepreneurs and connect with a team of experts poised to transform tax challenges into opportunities.