Caregiver And Tax Implications

[Tbagginz]

Quick question for anyone with experience in this issue. As a licensed caregiver if I where to have a patient or 2 am I supposed to be keeping a record of my outgoing expenses and any money that I recieve for my time and expenses when providing med to my patients ? Would this be a issue that is similar to a home business where you keep track of your out going expenses such as soil electricity use and such and then also report any fees you charges for your time and expenses to produce the meds for the patient? If I did decide to take on a patient or two I am just curious what the law would be in these situations I want to do this by the book so to speak.

[grewett]

"The book" being the IRS Code? Well are you aware of section 424 c? I forget exact section, it is in the 400's, but no matter, it says and means to convey, that NO expenses encountered in producing or selling marijuana can be deducted from gross income from that enterprise." Got it? Like that "book?"

 

This is not a Schedule C, legal business. This is how the IRS treats every criminal enterprise; says: 1) Tell us how much you made 2) Pay tax on the gross without subtracting one dime of expense. What I have seen (the few growers who report)do, is they write on the Federal form on the Miscellaneous Income line a net number (gross minus expenses). I have seen that number at $412,000; $796,000; and others. The usual I've seen is self-prepared. Th usual tax preparer will not do this for you! The point being the numer entered began life as a much larger number (gross income) and was pared to what was entered by subtracting the expenses just as if it was a Schedule C they were completing but only the bottom line (net) number was shown, nothing else.

[MORE COWBELL]

this is their backdoor to MMM pocketbooks...tax collection...they have all our records and are trying to figure out how to get at all that money...RETROACTIVELY too!

[Vaporeyes]

Why is is that when they give us something we want more? Tax free income would be nice. It isn't legal, but would be nice. You can legally grow medical marijuana in Michigan, but if you sell it you have income. If you do not pay tax on income, it is called income tax evasion. They put you in jail for that, too. So why get a card at all? The IRS expects taxes on illegal income. There is a place on the form to enter it, if you really want to go that way.

 

You can start an LLC. You can call it anything that you want to call it. It is filed with the state, not the fed. You can write off expenses and pay tax on income (both state and fed). If the IRS audits you, they will probably deny the write offs, unless you are more creative than I am.

 

This law says that you can be compensated for your time and expenses. That is what happens in every business. I would feel more comfortable in front of any judge, admitting that I was trying to pay taxes on income than try to plea that I was simply compensated for time and expenses. You would have to keep better records for every year than the guy who pays taxes and try to break even (or show a loss) against an IRS prosecutor. Why fight it? This makes it all that more legitimate. I look forward to claiming my own home business this year. The initial write off will be large, but not by small business standards. I won't show a profit in my first year, but most small businesses don't. After that I can write off my electricity (for my grow - not personal use). Nutrients, bulbs and other consumables will be write offs. I should show a decent profit in my second year. I don't mind paying taxes on profit. I would not take the chance to get busted growing before it was legal. The last thing that I want is to go to jail for not paying taxes now. This is the best darn home business in the world!

[Frank R]

Just a modest proposal.

Like all other Michigan business owners I believe that I should have to pay no taxes what so ever.

In fact, I am thinking the state of Michigan and its tax payers should be paying me for the privilege for me to continue my business operations in this state.

If allowed, I would prefer that my business tax refund be taken from social programs that support the poor, the elderly, and children.

 

Just a modest proposal...

 

Seriously, check out James Campbell at Numbers accounting in Royal Oak.

He's very MMJ friendly, and will also help set up your grow as a business if you need that service as well.

Numbers

He also provides a lot of good advice on Facebook, check it out.

[bobandtorey]

FAIRFAX, Calif.—The founder of a Marin County medical marijuana dispensary says the Internal Revenue Service is demanding millions of dollars in back federal taxes following an audit that disallowed its business expense deductions.

 

Lynette Shaw of the Marin Alliance for Medical Marijuana tells the Marin Independent Journal the agency based its decision on a tax code provision that blocks such deductions for illegal drug traffickers.

 

The IRS says it cannot confirm or deny any audits because of disclosure and privacy laws.

 

Dispensary operators and attorneys say pot clubs across the state are facing similar audits. Shaw and other dispensary operators say not being able to take business deductions would force them to shut down. She says she plans to fight the audit's findings.

 

http://www.mercurynews.com/breaking-news/ci_17596645?nclick_check=1