Taxes and Marijuana, Oh My!
So, Colorado just become another state in 2014 to legalize the sale of pot.
More and more states are legalizing the use of pot. I've even had a few people approach me about what might be involved in setting up a legitimate pot growing business in New Hampshire.
For one, it's against the law in New Hampshire. But the big problem, if youÂ go and set yourself up in a 'legitimate' state, is that it is still against Federal law.
Let me explain why this is a problem for taxes.Â Some might assume (what's the big deal) that I'll just set up my businessÂ and make sure I pay my taxes..Simple enough?
Here's the problem. Although you are required to report your income from whatever source, you are NOT entitled to take a single dollar of deduction against that income if the business is illegal.
So, if you had a pot growing business with $300,000 of gross sales, and you had $200,000 of expenses associated with it, you would have to pay taxes on the whole $300,000.
...and now you know...
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Copyright 2014 by Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, a PASBA member accountant, located in Londonderry, New Hampshire, with more than twenty- five years experience on Federal and New Hampshire issues affecting small business, and specializes in keeping his clients OnTrack with bookkeeping, tax, and payroll services for a fixed monthly fee. Learn more about Steve's exclusive SIX Step system developed for small businesses at www.appletreebusiness.com/map.