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How Does Caregiver Income Get Taxed?


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#1 xxsesimeseedxx

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Posted 20 May 2010 - 07:26 PM

As a caregiver, am I required to report my income generated by my services? If so, is there a certain percentage? Feel free to elaborate as much as possible ;)
Thanks in advance to all replies!

XxSesimeseedxX :)

#2 lkline300

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Posted 20 May 2010 - 07:36 PM

All Income is supposed to be claimed. I believe there are a few ways to go about it.

You can Claim Income from self employment. This allows you to claim expenses, IE; euipment . supplys & the the use of your home, etc.... There is a minimum tax for the self employed.

You may be able to just claim your profit after expenses as additional income but not sure on this one.

I'm sure some others will have more ideas.....

hope this helps.

#3 Done Here

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Posted 20 May 2010 - 07:37 PM

From what I understand when it comes to running a "Business" in your home and taxes. You take the square footage of your home and figure what percentage of your house that is, then you take that precentage of your utilities. Also keep your reciepts for chemicals/dirt equipement as those can be claimed as well. As far as patients and taxes your guess is as good as mine!

#4 tooldini

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Posted 20 May 2010 - 11:41 PM

Onehitter is correct, I have been running an at home business for years doing mobile windshield repair. Get nice deductions from home space,utilities,fuel, equipment,supplies,etc. Allowed deductions are usually bigger than what I actually use. I would assume it would be the same for a caregiver.

#5 MiMedicalMJ

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Posted 21 May 2010 - 12:14 AM

You need an accountant!
If you are in Metro Detroit and need a MMJ friendly accountant who can help you with
all deductions and all contact me.

#6 ricardomd

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Posted 21 May 2010 - 07:43 AM

I too have been deducting part of my home expenses as a home business but my acct. told me it was one of the deductions that "flag" in the IRS computer and raises your risk of audit. Just a thought. R

#7 Guest_Wayne_*

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Posted 21 May 2010 - 11:21 AM

The IRS will not provide home business tax credits for cannabis cultivation or cannabis related services.

#8 UrbanFarmer

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Posted 21 May 2010 - 11:31 AM

The IRS will not provide home business tax credits for cannabis cultivation or cannabis related services.


Has there been a ruling related to caregivers in mmj states? Or is it just the blanket "fed law trumps state law"?

If that's the case, should caregivers only use home-based biz designation on state returns and not federal?

Potential Catch-22. Gotta report the income, but if you don't, well, we know the answer to that one lol

#9 MiMedicalMJ

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Posted 23 May 2010 - 08:34 AM

The IRS will not provide home business tax credits for cannabis cultivation or cannabis related services.



Wayne....
I HIGHLY doubt you are an accountant based on your statement.

Michigan will also not give you tax credits for Cannabis related service.

Thats why you are patient services.

As I said, when someone needs a real accountant who knows what they are talking about and can help you
decide if a LLC or Non Prof is best for you let me know. I have a great guy.

#10 phaquetoo

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Posted 23 May 2010 - 08:46 AM

Isnt it bad enough that we registered with the state? Now you want to pay them also? LMFAO! You dont have to claim sheet!

I was self employed my whole life, I paid self employment taxes, and state taxes, and claimed my home and all of my auto, rite down to my old bag phone!!!!, now I would never claim taxes on the lb's I sold getting thru rough times! and im not going to claim the income i recieve from a few patients! they cant claim the mm you give them so why would you claim an income from it? I beleive the law says you can get paid for services, not product?

Posted Image
Free the weed!
peace!
Jim

#11 phaquetoo

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Posted 23 May 2010 - 08:47 AM

Posted ImageCorrect me if im wrong? I would love my ins co to pay for my mm!

#12 Guest_Wayne_*

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Posted 23 May 2010 - 08:55 AM

What type of patient services can an unlicensed individual with no specific educational experience deliver? Could this be like a faith healer, voodoo practitioner, medicine man, as well as cannabis caregiver? The IRS has rulings accepting these types of practices as home businesses? I can't believe everybody wouldn't being doing so just to get the tax breaks.
Coul your accountant cite some specific rules or rulings?

#13 MiMedicalMJ

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Posted 23 May 2010 - 09:40 AM

Multiple Wayne... Patient Consultation for one, you can be consulting them on exercise
diet, scheduling, activities, errands etc etc etc.

Talk to a lawyer and talk to an accountant, I already have.....

And FYI Fortune Tellers who work out of their homes write off a home as do massage therapists.

There are MANY types of consultants who are not licensed in various fields.

As for citing cases, if you want that info I suggest you contact a lawyer or accountant. I am confident in the information provided
to me as I have run many various businesses over the years (home based as well as store front) and have never had issues as I hire
people who know what they are doing and I pay them their fees and the Gov my taxes.

#14 Guest_Wayne_*

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Posted 23 May 2010 - 10:51 AM

I know I've seen an IRS/court ruling denying deduction of equipment utilized in cannabis cultivation. Maybe I misunderstood it.
So lights, hydroponic equipment, and other cannabis cultivation related costs can be deducted when providing consultation? Any farm credits available? Low cost agricultural loans? This would be a great aid to expanding caregiver availability.

#15 classact67

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Posted 23 May 2010 - 12:05 PM

Here is something for you all to think about...We got this law pasted on one of many issuses one bring the tax base it can provide to the state...that being said if we enjoy our "home based" bussines then pay the goverment there money...You for lack of a better term"you grow" the cash in your basement...So if I tell you here is a Grand you can keep 800 just give the goverment theres. You would do it... samething...
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#16 MiMedicalMJ

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Posted 23 May 2010 - 01:33 PM

Do not even try to get into anything under Agricultural... You want to deal with the FDA? Those credits are for farming are also federal and as cannabis is illegal no way they will give you farm credits....

Anyway I am not going to sit here and argue about an issue an accountant should be consulted for.

For what exact deductions you can utilize a pro would have to look into that.

Its just like people looking for legal advice on here... Seriously call the pros thats what they trained in and get paid for.

If you get called before the IRS, a Judge or anyplace "I was told on the web in a forum this was ok" is not gonna stand up to well haha.

The ? asked here was if he needed to report income as a CG and the answer is yes :)

#17 dlovas

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Posted 24 May 2010 - 11:52 PM

As a caregiver, am I required to report my income generated by my services? If so, is there a certain percentage? Feel free to elaborate as much as possible ;)
Thanks in advance to all replies!

XxSesimeseedxX :)

Do barbers and bar owners report their PROPEr Income..? Seriously why bother....Are you making 100k like some CG's say they are...lol....legally...lol....

So your 1,500 a month cash your getting as CG do you really want to get a payroll service on that like Paychex or ADP and pay uncle sam..? They already Robh is blind as it is...
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#18 dlovas

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Posted 24 May 2010 - 11:55 PM

Isnt it bad enough that we registered with the state? Now you want to pay them also? LMFAO! You dont have to claim sheet!

I was self employed my whole life, I paid self employment taxes, and state taxes, and claimed my home and all of my auto, rite down to my old bag phone!!!!, now I would never claim taxes on the lb's I sold getting thru rough times! and im not going to claim the income i recieve from a few patients! they cant claim the mm you give them so why would you claim an income from it? I beleive the law says you can get paid for services, not product?

Posted Image
Free the weed!
peace!
Jim


anybody whp claims income from being a CG is fuxing HIGH on CHRONIC. Cash money ...no trace. No place to find it..
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#19 MiMedicalMJ

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Posted 25 May 2010 - 08:08 AM

anybody whp claims income from being a CG is fuxing HIGH on CHRONIC. Cash money ...no trace. No place to find it..


And people with that attitude are what is going to hurt this cause....
One big reasons the states are doing this is tax revenue and if you don't pay taxes you will pay big time in the long run.

Not paying taxes is truly stupid....

Its a business, you need to file taxes.... It is a cash business so you have room where you could play with your profit margin BUT
if you think you are gonna slide under the radar and not even file GOOD LUCK!

Enjoy big big fines

PS Do you know the IRS will give someone who turns you in a nice % of everything they collect from you....
Better not tinkle off any other CGs you know or your patients.

#20 peanutbutter

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Posted 25 May 2010 - 08:23 AM

What type of patient services can an unlicensed individual with no specific educational experience deliver? Could this be like a faith healer, voodoo practitioner, medicine man, as well as cannabis caregiver? The IRS has rulings accepting these types of practices as home businesses? I can't believe everybody wouldn't being doing so just to get the tax breaks.
Coul your accountant cite some specific rules or rulings?


If you must .. section 280e

A little history. Someone got busted. They reasoned that:
1. The government claimed he was running an illegal business.
2. The government wanted their taxes from the business that he ran.
3. It is reasonable to claim lawyer fees as business deductions.

So he claimed the lawyer fees for his trial lawyer as a deduction from the business.

The court held that he could claim his attorney fees.

So congress passed a new part of the tax code so that drug dealers could not claim a tax deduction just because they got busted.

So then .. 280e says that if your business is about a schedule 1 or schedule 2 drug, you are not allowed to take any deductions at all. NONE AT ALL!!!

So then .. say your entire year looks like this:

1. 1/1/2010 bought a ounce for my patient for $300.00
2. 1/2/2010 delivered the ounce to the patient for $300.00

So the items you are supposed to tell the IRS about is item number 2. You are not allowed to list item number 1. According to section 280e of the federal tax code you are not allowed to use any deduction at all.

So your schedule c would show $300.00 of taxable income.

However .. if I have a gardening and consultation business ..

Important note here:

There are several attempts to reschedule marijuana from schedule 1 to 2. That will not help us in being honest with our tax filings. Marijuana would still fall under 280e as 280e covers both. Tax law would still be used against us.

Never ever ever ever mention marijuana on ANY tax form.
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