Reduce Your Taxes With 471 Allocations With Jim Breese CMO at - PowerPoint PPT Presentation

Reduce Your Taxes With 471 Allocations With Jim Breese CMO at GreenGrowth CPAs

Disclaimer The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Outsourcing Your CFO ● Cannabis Business Operators have serious financial risk ● Get help with Monthly/Quarterly/Annual reporting ○ Setting up accounting system ○ Monitor cash flow ○ The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

What is the § 1.471-1? ● Tax code that defines inventory capitalization rules for businesses ● Inventory = CoGS ● Lower Margins = Less Taxes ● Not Random Must use an acceptable methodology for cost allocations ○ The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

How do 471 allocations work? ● When your outsource your CFO service to GreenGrowth CPAs a. Initial setup & analysis of your financials b. Review all of your costs c. Monthly cost allocation for tax planning ● Three Benefits: a. Receive a budget (financial model) b. Strategies to save money and allocate costs c. A projected tax liability estimate The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Receive a Budget ● Custom Financial Model Many inputs that drive your business financials ○ Run a sensitivity analysis ○ ● Improve the accuracy of business and tax planning The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Strategies to Save Money & Allocate Costs ● Analysis of how much of each cost that you are able to allocate to COGS Calculate your tax savings ○ The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Projected Tax Liability Estimate ● Best to plan ahead for taxes Not surprised ○ ● Drives Monthly Fund Flow Management How much cash to allocate ○ Reduce cash crunch in April ○ The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Cannabis Resellers vs Cannabis Processors ● Reseller Direct Costs - product, materials ○ Indirect Costs - rent, utilities, payroll, licensing, and insurance ○ Can’t capitalize indirect costs ■ ● Processor Direct & Indirect Costs ○ Allowed allocate percentage of indirect costs to COGS ○ Heavy, light, value-added manufacturing ○ The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

How to Qualify as a Processor ● Check your license type & permissions - Manufacturing Financial analysis for new license ○ Potential ongoing tax reduction ■ ● Capabilities & space What do you have the ability to actually do ○ ● Limited space? Bulk flower for pre-rolls ○ Bulk cartridges for branded cartridges ○ The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Example of Tax Savings Before After 471 Allocations Revenue $2,000,000 Revenue $2,000,000 CoGS $1,000,000 Direct CoGS $1,000,000 Additional Allocations $260,000 Gross Margin $1,000,000 (50%) Gross Margin $740,000 (37%) Tax @ 21% $210,000 Tax @ 21% $155,400 Tax Savings of $55,000 EVER YEAR Reinvest in your business The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.