How Does Caregiver Income Get Taxed?

[peanutbutter]

As soon as CGs have to pay taxes on their product,you can bet your butt that prices will go WAY down. My comment will tinkle a lot of people off,but you all know it's true.

 

I'm not sure how that works..

 

Put taxes on something and that makes the price go down?

 

From what I understand, if you have a producer and a consumer, the cost of business goes up and the additional cost gets passed on to the consumer.

 

So if someone has $100 worth of expenses to produce widgitX and suddenly there is a tax of $100 put on the widgitX I think it unlikely that the widgetX producer would suddenly sell them for $50 each.

 

Most manufacturers would raise their prices to make up for the tax they have to pay. Or close up shop and go out of business.

[nkprthrd]

As soon as CGs have to pay taxes on their product,you can bet your butt that prices will go WAY down. My comment will tinkle a lot of people off,but you all know it's true.

 

Not sure where you're figuring this out.

 

If a someone sells 100 units per month for $20/unit and his real cost of production is $400, giving a margin of $1600 while paying no taxes:

 

Revenues: $2000

Expenses: $400

Taxes: $0

Profit: $1600

 

If he is then taxed at a rate of 20% (using PB's no deductions paradox):

 

Revenues: $2000

Expenses: $400

Taxes: $400

Profit: $1200

 

To reach the same profit point as before, the CG would need to raise prices to cover that $400 payout, and consider that for every new dollar charged to the patient, he is only gaining 80 cents. So now instead of $20/unit the price would become $25/unit.

 

Revenues: $2500

Expenses: $400

Taxes: $500

Profit: $1600

[+420Atheist]

I think taxing has one huge benefit. It gives money for the people in Lansing to play with. They will become dependent on it. The money they get will be more important to them than the money the police get from arrest. It will be more likely they will support legalization if they are getting the dollars vs. the local police departments.

 

I say heavy taxed legal cannabis is less expensive than being arrested and hiring a lawyer.

[The Digital Nomad]

The MOCC has a Tax Accountant speak at our meetings to explain the tax laws.

 

Remember - you file taxes on two levels - Federal and State, we are primarily interested in filing State Taxes, as the Federal level does not reconise legal farming of marijuana yet. Their loss.

 

The prices go down as we become more legitimate. As more growers feel safe in providing meds, there will be more meds - supply meets demand, prices go down. Until more growers feel like this is a legitimate business, there will not be enough growers to meet the demand by patients.

 

If the tax is $50 per ounce, then we all can sell at $200 to $300, add the tax. The median price range seems to be about $250 to $350 an ounce right now. While the price to the customer has not changed, it has not increased due to the tax. Of course I am not going to get into a price debate - thats between your grow setup and your patients.

 

The IRS CAN use guessimate numbers to figure out what you owe them if you fail to file. The current scenario is the IRS will believe that CGs make about $17,500 per plant, per year (or even 4x a year as most harvest four times a year). They WILL ASSUME you grew your full allotment (say 24 plants as you have two patients, even though you only grew 12 to care for them) - so they will calculate what you owe - $17,500 x 24 plants, thats $420,000 (nice number!) x 4 harvest a year = you now owe the IRS taxes on $1,680,000! Trust me, thats how the IRS thinks. They busted a massage parlor by counting the number of used towels and doing their IRS Math to convict the owner for tax evasion. The same went for laundry of restaurant table clothes, counting napkins they ordered, etc.

 

Today is your lucky day - The MOCC Tax Accountant we have speak is

James Campbell CPA

248-794-0798

james@numbers-accounting.com

royal oak

numbers-accounting.com

 

Remember, ignorance of the TAX law is no excuse...

 

-DN

[peanutbutter]

Remember, ignorance of the TAX law is no excuse...

 

-DN

 

Even Albert Einstein couldn't understand the US tax code.

 

At least that's what he said.

[medigrowr]

any income over $400 must b declared. Best way to do it as a small business, see what best category suits u in the form, If you made candles or cookies as a business u can write off home office use, cell phones, portion of electricity, etc. U have to have receipts for everything (expenses)u can incorporate ur MJ $ into the other biz and claim it as income, like "I sold x $ amount of cookies" u can say u sold em door to door, how r they gonna check? There r was but you MUST claim the income or risk getting screwed (even more) by the IRS or state tax people...

If u r selling a product to people, ANY product, MJ or not, and u make over $400 u r running a small business, period.

[curiousdave]

The MOCC has a Tax Accountant speak at our meetings to explain the tax laws.

 

Remember - you file taxes on two levels - Federal and State, we are primarily interested in filing State Taxes, as the Federal level does not reconise legal farming of marijuana yet. Their loss.

 

The prices go down as we become more legitimate. As more growers feel safe in providing meds, there will be more meds - supply meets demand, prices go down. Until more growers feel like this is a legitimate business, there will not be enough growers to meet the demand by patients.

 

If the tax is $50 per ounce, then we all can sell at $200 to $300, add the tax. The median price range seems to be about $250 to $350 an ounce right now. While the price to the customer has not changed, it has not increased due to the tax. Of course I am not going to get into a price debate - thats between your grow setup and your patients.

 

The IRS CAN use guessimate numbers to figure out what you owe them if you fail to file. The current scenario is the IRS will believe that CGs make about $17,500 per plant, per year (or even 4x a year as most harvest four times a year). They WILL ASSUME you grew your full allotment (say 24 plants as you have two patients, even though you only grew 12 to care for them) - so they will calculate what you owe - $17,500 x 24 plants, thats $420,000 (nice number!) x 4 harvest a year = you now owe the IRS taxes on $1,680,000! Trust me, thats how the IRS thinks. They busted a massage parlor by counting the number of used towels and doing their IRS Math to convict the owner for tax evasion. The same went for laundry of restaurant table clothes, counting napkins they ordered, etc.

 

Today is your lucky day - The MOCC Tax Accountant we have speak is

James Campbell CPA

248-794-0798

james@numbers-accounting.com

royal oak

numbers-accounting.com

 

Remember, ignorance of the TAX law is no excuse...

 

-DN

 

Where do you or the IRS come up with $17,500 per plant? Is that assuming each plant by some miracle produces 2 lbs? I am assuming this is retail pricing and not wholesale/volume.

[Southern Cross]

Where do you or the IRS come up with $17,500 per plant? Is that assuming each plant by some miracle produces 2 lbs? I am assuming this is retail pricing and not wholesale/volume.

The IRS will always assume the maximum amount and once they come after you it's up to you to prove otherwise. So they will figure $20 per gram times 28 grams per ounce times 16 ounces = $8960 times 2 pounds = $17,920.

 

They get the $20 per gram from the prices charged by dispensaries. They get the 2 pounds per plant from the DEA. And they will assume it's all profit. So it's probably better to be up front about the fact that you are receiving income, then talk to a tax accountant about the best way to file.

 

It's important to include as much information as is required, but don't volunteer any information that isn't required.

 

I'm not a tax accountant, but I did stay at a Holiday Inn one night.

[pic book]

Apparently the IRS thinking for nonfilers is that 'since you assumed you didn't have to file taxes, now we will operate on our assumptions, which are that no matter how much you made we now have the right to assume you made however much we wish and now that we've discovered you, to take taxes on it.'

In what I say below, I'm not saying this is how you should file taxes, or that this is how your CPA will choose to file for you, but I was recently surprised to discover that for both state and Federal, mine files only one number for my growing/caregiving business. It is a net number filed on the line "Miscellaneous."

All I'm going to say.

Edited September 11, 2013 by pic book

[Growrilla]

Isnt it bad enough that we registered with the state? Now you want to pay them also? LMFAO! You dont have to claim sheet!

 

I was self employed my whole life, I paid self employment taxes, and state taxes, and claimed my home and all of my auto, rite down to my old bag phone!!!!, now I would never claim taxes on the lb's I sold getting thru rough times! and im not going to claim the income i recieve from a few patients! they cant claim the mm you give them so why would you claim an income from it? I beleive the law says you can get paid for services, not product?

 

Free the weed!

peace!

Jim

 

 

Nice! i agree

[Dlo]

Does anyone know a accountant - CPA in Genesee County. Info would be much appreciated.

[dead4grateful20]

Do you know if you can write off grow equipment and gas travel?

[Mr. Wilson]

Seems to me if you pay Federal taxes and get audited, they could easily figure out where you got the income and for what reason.

 

Right there you are screwed because by filing, you already admitted breaking a Federal Law. The Feds don't accept Michigan state law so you are just another two-bit drug dealer, EXCEPT, you are a drug dealer, who just admitted that you make money off illegal drugs.

 

It's like some mob guy paying taxes on his gambling profits. Doesn't seem too smart even if it is a gesture for good citizenship.

 

State taxes are different. To them it is legal. I would be tempted to pay them.

 

The big question to me is, will the feds be able to poke their noses into the State Tax files and pluck out the suspected dealers whenever they like?

 

If yes, then we're screwed again.

[phaquetoo]

Seems to me if you pay Federal taxes and get audited, they could easily figure out where you got the income and for what reason.

 

Right there you are screwed because by filing, you already admitted breaking a Federal Law. The Feds don't accept Michigan state law so you are just another two-bit drug dealer, EXCEPT, you are a drug dealer, who just admitted that you make money off illegal drugs.

 

It's like some mob guy paying taxes on his gambling profits. Doesn't seem too smart even if it is a gesture for good citizenship.

 

State taxes are different. To them it is legal. I would be tempted to pay them.

 

The big question to me is, will the feds be able to poke their noses into the State Tax files and pluck out the suspected dealers whenever they like?

 

If yes, then we're screwed again.

 

 

Read my lips! NO TAXES!! hmmm i think i heard the phrase before! but I truly mean it!

[dutch&Dutchess]

Schedule C P&L statement seems to be a start

[Dlo]

I'm not sure what your all talking about. I meet with a CPA on Tuesday and he told me it is no different then any other business. You don't tell them its marijuana. He recommended a LLC.

Sounds good for me Considering I dont have much income from it but have a lot of right offs.

 

Not filing anything a bad idea.

 

You do what you do. Ill do what I do. We`ll keep in touch, let me know how it works out for you.

 

 

If anyone in Genesee Co. Need the number let me know.

[Mr. Wilson]

So you start a business, do all your accounting, income, expenses, etc. but never mention the "M" word. Then file a tax return.

 

You get audited and are sitting in front of Mr. IRS man. Do you really think, he won't be able to find out that you are making income off marijuana?

 

As soon as he finds out, and he will, you are a federal criminal AND have just admitted it by filing the return and signing your confession.

[kirsten]

According to my CPA, the IRS has confidentiality laws that they have to follow and are not allowed to give personal info to the department of justice. He said even people who live in states where its still illegal claim it and that you stand to get in way more trouble if you evade taxes. Thats how they got Al Capone.

I don't think we can make progress if we are sneaking around. If we behave like criminals they will think we are.

But do what you want.

[xxsesimeseedxx]

According to my CPA, the IRS has confidentiality laws that they have to follow and are not allowed to give personal info to the department of justice. He said even people who live in states where its still illegal claim it and that you stand to get in way more trouble if you evade taxes. Thats how they got Al Capone.

I don't think we can make progress if we are sneaking around. If we behave like criminals they will think we are.

But do what you want.

 

Just because the IRS has confidentiality laws doesnt mean they wont report you to the DOJ. My recommendation is DONT CLAIM A DIME! If a caregiver is a TRUE compassionate caregiver that doesnt rape people on prices, and this caregiver claims his/her income for MMJ, they he/she is screwing themself over. If the IRS decides to audit this person, they will automatically think the cg is lying because they are claiming so little. Then what? You get charged a SICK amount of interest plus get thrown in jail. I'd rather just get thrown in jail for growing, not tax fraud too.

[kirsten]

Just because the IRS has confidentiality laws doesnt mean they wont report you to the DOJ. My recommendation is DONT CLAIM A DIME! If a caregiver is a TRUE compassionate caregiver that doesnt rape people on prices, and this caregiver claims his/her income for MMJ, they he/she is screwing themself over. If the IRS decides to audit this person, they will automatically think the cg is lying because they are claiming so little. Then what? You get charged a SICK amount of interest plus get thrown in jail. I'd rather just get thrown in jail for growing, not tax fraud too.

If they get you for growing and you have claimed nothing they can get you for tax fraud too.

[xxsesimeseedxx]

If they get you for growing and you have claimed nothing they can get you for tax fraud too.

 

Yes, you are right, but it is less likely to happen

[phaquetoo]

I'm not sure what your all talking about. I meet with a CPA on Tuesday and he told me it is no different then any other business. You don't tell them its marijuana. He recommended a LLC.

Sounds good for me Considering I dont have much income from it but have a lot of right offs.

 

Not filing anything a bad idea.

 

You do what you do. Ill do what I do. We`ll keep in touch, let me know how it works out for you.

 

 

If anyone in Genesee Co. Need the number let me know.

 

Sorry DBL post ,on my crappy phone

 

 

Good advise, hey you got any swamp land for sale?

 

You forgot to say you would try and keep in touch,,they dont let you call collect from jail,,,Unfortunatly my friend I know this from real life, 3 times since becoming legal!

 

[kirsten]

Good advise, hey you got any swamp land for sale?

 

You forgot to say you would try and keep in touch,,they dont let you call collect from jail,,,Unfortunatly my friend I know this from real life, 3 times since becoming legal!

 

 

At this point I believe we need advice from a professional. If consulting a CPA who is willing to sign off on cg taxes is not enough, what is? If more people would come out of the closet and stick up for eachother maybe you wouldn't have had to go to jail 3 times. This is crazy. What other profession has to rack their brains to figure out how to pay taxes?

[phaquetoo]

At this point I believe we need advice from a professional. If consulting a CPA who is willing to sign off on cg taxes is not enough, what is? If more people would come out of the closet and stick up for eachother maybe you wouldn't have had to go to jail 3 times. This is crazy. What other profession has to rack their brains to figure out how to pay taxes?

 

 

so if i choose to medicate on my front porch in the country, I should go to jail!

 

If im on state land camping, under my canopy a real trailer not a make shift camp site, I should be arrested?(not state campground state forrest no one around but me/)

 

Good luck Kristen! Im legal and getting phaqed with, I hope you never do!

But maybe you will cause you Have a real bad attitude!!!

 

I think Im in love With You!

 

I need _ peace! lmfao!

FTW

Jim

[phaquetoo]

According to my CPA, the IRS has confidentiality laws that they have to follow and are not allowed to give personal info to the department of justice. He said even people who live in states where its still illegal claim it and that you stand to get in way more trouble if you evade taxes. Thats how they got Al Capone.

I don't think we can make progress if we are sneaking around. If we behave like criminals they will think we are.

But do what you want.

 

 

Kristen I may have been a lil rough in my first reply to you!

 

But im realy sorry tell the cpa that wants me to claim illegal activity to kiss my behind!

Now seriously do you think that if we claim weed we are selling we wont get into trouble even if we are not legal, as long as we pay taxes?

 

well from the words of jeff beck mrs your a better man than I !!

 

Hillarious!

men are from earth woman are from venus, lol all good!

I wish you the best of luck and I wish you no harm,,

You are most likely the nicest person any one could ever meet!

God Bless you and Yours!

Peace

FTW

Jim