“Before anything else, preparation is the key.”
-Alexander Graham Bell
The Corporate Transparency Act proposed new compliance rules that are currently impacting business owners nationwide. For the 2024 Calendar Year and the foreseeable future, additional reporting obligations have been enacted for business owners. Here is a quick recap of what you need to know.
What is BOI Reporting and Why Should I Care?
If you are a small business owner the answer to that question is: because it is a new requirement mandating all business owners to disclose details to the US Treasury Office about individuals who directly or indirectly own or control their company. This is an initiative to create transparency and deter financial crimes. There are some exclusions and exceptions but beyond that awareness and compliance are not optional as noncompliance could result in potential monetary penalties and/or up to 2 years of jail time.
What Do They Want to Know?
They want to know who the person is that has substantial control over the business. This is typically anyone who owns more than 25% of an entity and/or the person who exercises control over decisions (CEO, CFO, Executives, etc.). The response information includes ID numbers, legal names, addresses, and jurisdiction information about the entity.
When Does This Come Into Effect?
Right now! The new reporting requirement was issued as part of the 2021 Corporate Transparency Act. The administering organization is NOT the IRS but it is an affiliate that is also a part of the US Treasury, the Financial Crimes Enforcement Network, known as FinCEN.
If your business was formed prior to 2024, the deadline for your initial filing is January 2025. If at any point, there are changes in any of the information reported an updated filing must be submitted within 30 days of the change.
For more information, check out the FinCEN page.
If you have any questions about how these changes or any other tax matters could impact you or your business, please feel free to contact us.
