also, what can I deduct? I'm told to deduct the cost of producing product but not selling the product since the sale of it is federally illegal.
Agriculture is considered farming, so you would report the activity of your marijuana-growing business on Schedule F. You will find the Farm Income & Expenses section under the Business tab of TurboTax Home&Business.
The easiest way to find this area is to use the Search box at the top right of the TurboTax header. Enter "farm income", then click on the "jump to farm income" link.
Work through the interview to set up your business and enter your Cost of Goods Sold (expenses relating to producing your inventory). Federal law is in flux over this issue, but in most cases you may deduct COGS. Other "business" expenses may be disallowed. [revised]
Agriculture is considered farming, so you would report the activity of your marijuana-growing business on Schedule F. You will find the Farm Income & Expenses section under the Business tab of TurboTax Home&Business.
The easiest way to find this area is to use the Search box at the top right of the TurboTax header. Enter "farm income", then click on the "jump to farm income" link.
Work through the interview to set up your business and enter your Cost of Goods Sold (expenses relating to producing your inventory). Federal law is in flux over this issue, but in most cases you may deduct COGS. Other "business" expenses may be disallowed. [revised]
Has Maine Revenue Service weighed in on classifying medical marijuana as "Agriculture" for tax filing purposes? I know they have advised other registered caregivers to register as a "Drug Store," while some accountants are advising people to file under "Florist." [removed]
Raising a crop would fall under agriculture; selling a medicinal product might be categorized differently.
Good day..I came across your post and thought I would pipe in. I actually specialize in cannabis accounting and tax preparation and am extremely familiar with IRC 280e. It is very specific on how legal cann businesses are to file, etc. If you're a single member LLC, you would file utilizing Schedule C and not Schedule F.. which is odd I know since it is Ag. If you're a multi member LLC, you would file Form 1065, unless you elected to be treated as either a C Corp or S Corp.. then you would file accordingly. Good luck my friend!
Damon L. Mayer, EA
I would suggest you seek legal counsel in your state, since what you're doing is still a federal crime. Overall the IRS could care less what you do to make money. They only care that you pay taxes on your venture earnings. But then, the IRS has been weaponized in the past. So I would advise you seek legal counsel in your state on this.