Cannabis Business Income Taxes

cannabis taxes

Generally income tax returns are constructed to report business income, and then subtract cost of sales (the cost of producing or purchasing the product being sold) and the expenses of carrying on the business (things like employee wages, rent, and office supplies). There is an overriding provision for businesses that sell cannabis, however. Even though cannabis is legal in certain states, Section 280E of the federal income tax code states that no deduction is allowed for an amount paid or incurred in carrying on a business if the business consists of trafficking in controlled substances. Since marijuana is on the list of controlled substances, no deductions can be taken for the costs of carrying on the business of marijuana sales. Because of this, income tax represents a significant cost for these businesses.
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Mandatory Paid Sick Leave Enacted in New Jersey

paid sick leaveBeginning on October 29, 2018 employees in New Jersey may earn up to 40 hours of paid sick leave per year. A benefit year can be defined by the employer and cannot be changed without the approval of the Department of Labor. All New Jersey employers, except governments, are subject to this law. Employers who already have policies in place should confirm that they are in compliance with the new law.
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Tips for Employers

New Tips for Employers in New Jersey

Federal Tax Credits

Tips for EmployersThe Work Opportunity Tax Credit allows employers that hire members of targeted groups who face employment barriers to claim a credit against income tax for a percentage of first-year wages. In a recent News Release, the IRS reminds employers there are now ten categories of eligible workers: qualified IV-A Temporary Assistance for Needy Families recipients; unemployed veterans, including disabled veterans; ex-felons; designated community residents living in Empowerment Zones or Rural Renewal Counties; vocational rehabilitation referrals; summer youth employees living in Empowerment Zones; food stamp (SNAP) recipients; Supplemental Security Income recipients; long-term family assistance recipients; and qualified long-term unemployment recipients.
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Business Health Checkup: How advertising can help your business

advertisingAdvertising is communicating with customers in an attempt to influence their buying behavior by conveying a persuasive message about your products or services. Although we may not recognize it, businesses around the world use every media outlet possible to advertise their products or services. Some common advertising outlets include newspapers, Yellow Pages, direct mailing, television commercials, radio advertisings, billboard/vehicle advertising and online marketing (website advertising, business webpages, email chains, social media, etc.). The type of media outlet a business chooses depends on the type of customers the business wishes to reach, also known as the target market.
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To pre-pay or not to pre-pay?

Tax Cuts and Jobs ActTo pre-pay or not to pre-pay? That was the question that was the topic of many discussions relating to taxes at the end of 2017.  However, it only scratches the surface of the issues resulting from the passage of the Tax Cuts and Jobs Act (Act).  Most, if not all, taxpayers will be affected by the sweeping reforms.  Listed below are selected federal Act provisions and selected state tax provisions that may impact you for 2017 and beyond.  In light of these changes, we recommend that you begin tax planning as soon as possible.  That was the question that was the topic of many discussions relating to taxes at the end of 2017.  However, it only scratches the surface of the issues resulting from the passage of the Tax Cuts and Jobs Act (Act).  Most, if not all, taxpayers will be affected by the sweeping reforms.  Listed below are selected federal Act provisions and selected state tax provisions that may impact you for 2017 and beyond.  In light of these changes, we recommend that you begin tax planning as soon as possible.
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iPhone Users – Document Signing Tip

iPhone Document SigningLooking for an easy way to sign and return documents that are emailed to you? Tired of the long process of printing documents, signing them, scanning them, and attaching them to a reply email? If you own an iPhone, try this simple document signing technique.

When you open the pdf attachment on your iPhone, there is a suitcase-like icon on the bottom right of your screen when the pdf is open. If you click on that suitcase icon, it opens up mark-up tools that you can use to sign the document on your phone. Then, after signing, you simply click on “done” and it automatically brings up the reply email that includes the signed attachment and you then click “send.” Files secured with a password must be sent to you in a format with commenting to be allowed in order for the signature to be able to be added to the document in this manner.

If you are happy with this information, please use your iPhone and the time saved to refer a friend to Capaldi Reynolds & Pelosi, PA.

What Is Exit Planning?

Exit PlanningExit Planning – It might not be what you think

There’s a sign outside our office that lets the public know that our Firm assists in exit planning. Unfortunately it seems that a lot of people think this is a plan to exit the world of the living. Not so.

A good exit plan asks and answers all the business, personal, financial, legal and tax questions involved in transitioning a privately owned business. It includes contingencies for illness, burnout, divorce and death. Its purpose is to maximize the value of the business at the time of exit, while minimizing taxes and ensuring the owner the ability to accomplish all of his or her personal and financial goals in the process. When you have an exit plan, you are able to control how and when you exit (the business). Please contact Michael Reynolds for more information on exit planning.

Home Office Expenses: What you need to know

Home OfficeIf you use part of your home regularly and exclusively for business you may be entitled to a deduction for the expenses associated with maintaining that work space whether you are self-employed or an employee. However, for an employee expenses are deductible only if the space is used for the convenience of the employer.

This deduction is most valuable to the self-employed because it is a deduction against self-employment income. For employees the business use of a home is a miscellaneous itemized deduction, grouped with other deductions that must exceed 2% of adjusted gross income to be added to itemized deductions.
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