As a legal marijuana business owner, it’s important to stay up-to-date on the latest tax deductions and payroll information. In this blog post, we’ll discuss some of the most important things you need to know in order to keep your business compliant with the official state legislation. We’ll cover topics such as what taxes you can deduct from employee paychecks, how to handle payroll taxes, and more.
Keep reading for more valuable advice from one of the leading providers of cannabis accounting services.
The first thing you need to know is that, as of 2019, there are now two types of taxes that you can deduct from your dispensary employee’s payroll:
The amount of each deduction will depend on how much your employee earns per paycheck. As of 2022, the maximum amount that can be deducted from federal income tax is $12,200 per year. In 2021, the wage base limit for FICA was $142,800. By 2022, this limit jumped to $147,000. Keep in mind that this is the maximum amount that’s considered when determining the scope of Social Security benefits.
Another important thing to know is how to properly handle payroll taxes. Depending on the size of your business, you may be required to withhold payroll taxes from your employee’s paychecks and then remit them to the government on a quarterly basis.
Payroll taxes include Social Security and Medicare taxes, as well as federal and state unemployment taxes. If you’re not sure whether or not your business is required to withhold payroll taxes, please consult with your accountant or the IRS website.
In addition to federal income tax and FICA tax, you can also deduct state income tax, health insurance premiums, and retirement plan contributions from your employee’s paychecks. The amount of each deduction will vary depending on the individual’s salary and the specific deductions that they elect to have taken out of their paycheck. You can find more information about these deductions on the website of your state’s tax authority.
There are a few other things you should keep in mind when it comes to managing your dispensary’s taxes and payroll.
By staying up-to-date on the latest tax deduction and payroll information, you can ensure that your cannabis business remains compliant with state legislation. On top of that, you’ll be able to prevent some common bookkeeping mistakes and ensure that your business thrives.
If you’re looking for a team of professionals to outsource the accounting needs of your dispensary, look no further than the professionals at Green Leaf Business Solutions. We are dedicated to providing our clients with the highest quality of service possible and providing an excellent alternative to PEO options. Besides helping you navigate the complexities of compliance and payroll, as well as determining the taxes for dispensaries and cultivators, we also offer unique technical and HR solutions for business. We can be of great help with onboarding and recruitment, benefits planning, and many more.
Contact us today to learn more about how we can help your business grow! We’re looking forward to hearing from you!