Dear Stoner: I buy marijuana products for my job and the parties I host. Am I allowed to deduct them on my tax returns? I have the receipts.
Dear Pluto: I’m a Stoner, not an accountant, but I don’t think it’s smart to alert Uncle Sam to your federally illegal habits. Because of pot’s status as a Schedule I substance, cannabis purchases cannot be claimed on your federal taxes; dispensaries are hit by the prohibition even harder, since they’re unable to claim standard business deductions. The IRS has repeatedly stated that it won’t accept any cannabis-related deductions, and it’s currently defending that stance in federal court against claims from owners of a Palisade dispensary.
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
You have successfully signed up for your selected newsletter(s) - please keep an eye on your mailbox, we're movin' in!
Marijuana Deals Near You
The State of Colorado is a different story. Because cannabis is legal here, you can claim your cannabis business purchases as deductions on your state taxes. The Colorado Department of Revenue even has a special deduction form for licensed cannabis businesses, so it’s fully aware that there are jobs that require pot expenses. Even so, that’s a lot of work for you to get a relatively small deduction, and it’s still not exactly something you can put in TurboTax. If you don’t own the business and you work for a pot-related company, why not just file an expense report?
Have a question for our Stoner? E-mail firstname.lastname@example.org.