While we are unable to provide extensive tax advice to our practitioners, we want to do our best to ease the stress come tax season as best we can! This article will guide those who do not qualify for Form 1099-K to the necessary reports to complete your tax requirements as painlessly as possible. To see if you qualify for a 1099-K, please see US Businesses: Reporting your Income With Form 1099-K.
In this article:
Note: Our Customer Success team is available to answer any questions surrounding available reports, but are unable to provide extensive tax advice. Questions relating to how your taxes should be filed should be directed to a tax professional.
Accessing Your Financial Reports
To assist in your financial record keeping, Fullscript has created reports to aid in calculating gross sales, cost of sales, and net income. These downloads are available from the Reports section in your Fullscript account.
Reporting Your Income
A summary of values required for tax purposes can be accessed quickly from the Account Activity and Balance Report by selecting the desired reporting year from the drop-down menu shown below. These values can be used confidently to fulfill your tax requirements.
Account Activity and Balance Report summary for the 2018 tax year.
Calculating Gross Sales, Cost of Goods, and Net Income
The amounts in the Account Activity and Balance Report, as shown above, are calculated for you to facilitate the process of reporting your taxes to the IRS. The example below will walk you through how the report can be used to calculate these values on your own if needed.
Step 1: Downloading the Account Activity and Balance Report.
From Reports, locate the Account Activity and Balance Report, select the current year and Download as CSV or Excel file. In our example below, we will be looking into the 2016 tax year.
Account Activity and Balance Report summary for the 2016 tax year.
The downloaded report will follow the format of our example below. Commonly, your accounting and tax records will need to compute Gross Sales, Cost of Sales, and Net Income. This report will be used to calculate these values.
Sample CSV export of Account Activity and Balance Report.
The columns found in this report are:
|transaction_number||Represents the shipment ID|
|transaction_type||Payout, refund or shipment (order)|
|transaction_status||Amounts paid (for payouts), shipped (for order shipment), or received (for refund)|
|order_number||Customer order number|
|transaction_date||Date order was placed|
|sales_total||Represents the retail total and is calculated as the msrp_total less patient_discount|
|patient_discount||Discount the patient received|
|cogs_total||The fee earned by Fullscript representing product cost and fees associated with administering the transaction|
|amount||Represents your net earnings and is calculated as sales_total less cogs_total|
|balance||Running balance of funds available for payout|
Step 2: Calculating Gross Sales.
Gross sales represent the total retail value of orders transacted. For this, we sum up the values in the sales_total column. In this example, we see a total of $1,635.16.
Step 3: Calculating Cost of Sales.
Cost of Sales represents the cost your practice incurred to complete the sale. For this, we sum up the values in the cogs_total column. In this example, we see a total of $1,519.99.
Step 4: Calculating Net Income.
Net Income represents the total of the earnings payable to your business by Fullscript in the form of payouts. To calculate Net Income for the year, we deduct the Cost of Sales (Value B) from Gross Sales (Value A). In this example, we find a Net Income of $115.17.
Sample CSV Export of Account Activity and Balance Report with Gross Sales, Cost of Sales, and Net Income calculated.
Step 5: Report these values as needed to complete your tax obligations.
Our Customer Success team is unable to provide guidance on how taxes should be reported to the IRS. Further, we are unable to walk you through the completion of tax forms. Please contact an accountant or tax professional if you are uncertain of your tax obligations.
Fullscript will report all sales tax collected through your dispensary to the IRS. You do not need to report sales tax as a practitioner with a US dispensary.
Frequently Asked Questions
What do I need to share with my tax professional to complete my taxes?
✔ Account Activity & Balance Report (for appropriate tax year)
Why did I not receive a 1099-K?
We only issue a 1099-K form if you meet both of the eligibility criteria below enforced by the IRS:
- You had $20,000 USD in sales during the calendar year AND
- You received 200 or more payments during the calendar year
An exception applies to those in the states of Massachusetts and Vermont who will receive a 1099-K if $600 or more in sales is transacted. Visit US Businesses: Reporting Your Income With Form 1099-K for more information.