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Accounting, Tax, IRS & Marijuana

Marijuana Accounting Services

Jankovic LLC was one of the first public accounting firms to offer accounting and tax services to the Legalized Marijuana Industry in Colorado. We currently work with licensed medical and recreational marijuana dispensaries, cultivation facilities, infused product facilities, as well as hemp cultivators. We have designed an accounting and tax model that we recommend for our clients. We also perform the following services for our marijuana clients:

Maintain accounting records Provide weekly and monthly payroll services Provide comprehensive payroll compliance services Prepare federal and state income tax returns Prepare sales and excise tax filings Advise in selecting business structure and formation Prepare financial and accounting policy and procedures Perform internal control evaluations to discover weaknesses Provide financial consulting services for business owners for a variety of financial areas

IRS 280E Summary Marijuana business deductions are controlled by Internal Revenue Code 280E which was passed by the Congress in 1986 to prevent “illegal drug traffickers” of Schedule I and II substances (Controlled Substances Act) from filing a tax return with deductions and keeping ill gotten profits. Marijuana (unfortunately) continues to be listed as a Schedule I substance and the IRS actively enforces 280E against legal marijuana business owners in all states. The US Tax Court has upheld the legality of the IRS applying 280E to legal marijuana business in two significant cases, CHAMP & Olive.

How 280E Affects You 280E prevents an owner from taking tax deductions for significant expenses associated with selling such as advertising, budtender wages, rent costs, signage, and certain improvements. Inventory production costs associated with the grow, cultivation, or production of an extract or infused product are usually allowed as tax deductions if accounted for properly.

Contact Us for An Appointment Please call or email us to schedule an appointment for your marijuana business to discuss how proper allocations for Section 280E can help reduce your tax burden. In addition, please read our Blog for more news regarding accounting and tax issues in the Colorado Marijuana Industry.