collective owners

Budsmoker187

Well-Known Member
I formed a collective and I wear pretty much all hats at this point ( growing, office work, deliveries, etc) I do not have employment set up yet to hire myself although we have an EIN number. Question is how does one pay himself for doing collective work. I was thinking of just making a low set base amount to pay myself monthly but my concern is at the end of the year can I just pay taxes like any other job that would pay unpayrolled cash.
 

MightyMike530

Well-Known Member
Well it depends on how legit you want to keep it. If you pay yourself, you will be taxed, but the collective will also be taxed on its profits as well. IMO it doesn't seem quite fair if you are the sole owner/operator/employee of the collective to have business profits and wages taxed. But, that is most likely the absolute legal case, that both should be taxed.
 

Rusty Shakelford

Well-Known Member
Pay yourself a small salary weekly,, take the appropriate Employee taxes out of your paycheck and make regular deposits to the state. At the end of the year the IRS is gonna pull 280E on you, so you will need to figure out how much time was spent cultivating, versus how much time was spent selling. Cultivation is considered "Cost of goods sold" and is tax deductible, any part of the SALES are not deductible, so you will be able to deduct some of your Payroll Taxes as the Cultivation Part, but wont be able to deduct some of it cause of the Sales Part.

You will definitely need an accountant.

This is why any dispensary in Colorado has to cultivate at least 70% of its inventory, or the IRS would simply come in and take all of the money, leaving Colorado's new Marijuana Program BROKE. This way, the IRS can only Rape them for 30%, the rest is "Cost of Goods Sold".
 
Top