An Important Update for Business Owners Before the Holidays
As the year comes to a close, I need to share an urgent update that affects business owners everywhere. Yes, it’s right before Christmas… but I promise this message is worth your attention.
The Beneficial Ownership Information (BOI) reporting requirement is back. A Texas appellate court has lifted the injunction that temporarily paused the enforcement of BOI compliance. If you’ve been keeping up with this situation, it probably feels like the plot of a telenovela.
Throughout December, I’ve been advising my clients and readers to prepare their BOI reports, even amid the uncertainty. Why? The penalties for non-compliance are some of the most severe I’ve ever seen. For more background and context, take a look at these articles:
Let’s look at what this means for you going forward.
An Ever Shifting Regulatory Landscape
The regulatory environment for small and medium-sized businesses is more complex than ever, and staying ahead of these changes can feel overwhelming. The BOI reporting requirement, introduced under the Corporate Transparency Act (CTA), was designed to promote transparency. However, its implementation has sparked confusion and concern among business owners.
December has been especially tumultuous. The initial injunction on December 4th gave business owners temporary relief from compliance concerns. But on December 23rd, the injunction was lifted, putting BOI reporting requirements back in full force.
So, what does this mean for you? Let’s break it down so you can move forward with clarity and confidence.
What Does This Mean for Your Business?
The lifting of the injunction confirms that BOI compliance is now a reality, not just a hypothetical issue. Acting quickly and strategically is essential.
Understanding The Deadlines: The deadlines for filing BOI reports remain unchanged, with many businesses required to comply by January 13th, 2025. Please note that certain situations now require a deeper analysis of your specific filing requirement. To stay compliant, discuss with you tax strategist and legal counsel to make sure you do not end up with a penalty you have to pay later.
Gathering the Necessary Information: BOI reports require details for each beneficial owner, including their name, address, date of birth, and a unique identifying number (such as a driver’s license or passport). Preparing this information in advance will make the process much smoother.
BOI Compliance in Action: Examples for Different Business Structures
LLCs: Imagine you own a small marketing agency structured as an LLC with two partners, each holding 50% ownership. Both partners qualify as beneficial owners and must be included in the report. Even for a straightforward business like this, failure to file could lead to significant penalties.
S-Corps: Let’s say you operate a family-owned business structured as an S-Corp with three shareholders. If one shareholder owns 30% and the other two hold 35% each, all three must be disclosed in the BOI report. While this may feel invasive for family businesses, compliance is non-negotiable.
I want to stress here that what you see above are just some simple examples… I know I’ve said it before, but it bears repeating – discuss your compliance requirement with you tax and legal professional before making any decisions that could impact you in the future.
What to Do Next
If you haven’t filed your BOI report yet, here’s how to get started:
1. Assess Your Business Structure: Determine who qualifies as a beneficial owner in your organization. If you’re unsure, consult a tax strategist or legal advisor to avoid mistakes.
2. Prepare the Required Information: Gather and verify all necessary details for each beneficial owner. Accuracy is critical to avoid compliance issues.
3. File Your Report: Use the federal filing system to submit your BOI report. If the process feels overwhelming, professional assistance can save you time and stress.
4. Stay Updated: BOI reporting requirements continue to evolve. Regularly monitor updates to ensure your business remains compliant.
Let Weston Tax Associates Help
Navigating BOI compliance doesn’t have to be a solo effort. Our team is here to take the stress out of the process. Visit our dedicated website for this purpose to learn how we can handle your BOI filing for you.
Building a Stronger Business Through Compliance
BOI compliance is more than a legal obligation… it’s an opportunity to solidify your business’s foundation. By meeting these requirements, you align with federal standards and foster trust with your stakeholders, partners, and customers.
If you’re feeling uncertain, don’t worry. Expert help is just a click away. Just head HERE, and we’ll guide you every step of the way. Let’s make compliance work for your business, not against it.
Welcome to the New Age of Accounting. Let’s begin.
