Cronin, Hanley, Van Zile, & Lorenzo, LLC

CHVL

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New Important Tax Filing Deadline – Beneficial Ownership Reporting Due by January 1, 2025

There is a new Beneficial Ownership Reporting that is due for small businesses by January 1, 2025.

What is the new requirement?

In 2021 a new bi-partisan law was passed requiring substantially all small businesses to register with the Treasury Department’s Financial Crimes (FinCen) Division by the end of 2024.

I don’t have a business, why am I getting this email?

The timelines are short, and the penalties are severe if you do not file.  We are letting all our clients know even if they currently don’t file business tax returns.  These are some instances where you may be affected:

  1. If you created a business earlier this year, you may already be late. If you create(d) a business at any time during 2024 your deadline for filing is not January 1, 2025, but is 90 days from the date you filed the formation documents with your Secretary of State.  You may not have informed us about these new businesses, instead, waiting until tax season to do so.
    – Please note that if you form a business during 2025 the deadline will be 30 days from formation.
  2. You may have an LLC that you don’t consider a business, but the Treasury does:
    a. A single member LLC that has not had any income yet
    b. An LLC (single or multi-member) that holds property and does not file a separate tax return

 

  1. If you receive a K-1 from a business, the business that provides you with the K-1 may request information from you to prepare the business filing.

 What Business/Entities are Required to File?

A small business is defined as having less than $5 million in sales AND less than 21 full-time employees.

Despite there being 23 exemptions for this reporting, it is expected that over 99% of small businesses will not meet any of these exemptions.

 I closed my business during 2024 do I still need to file?

Yes.  If you filed with the Secretary of State to dissolve your LLC or business during 2024 you are still required to file.

 What is Required to be Filed?

  1. Information for the Business – Name, DBA(s), Physical Operating Address (no PO Boxes), EIN, Date and State Formed. If you have not yet filed for an EIN, you will need to do so.
  2. Information for Business Owners who directly or indirectly own 25% of the ownership interest.  – Name, Tax ID Number, Address, and a valid unexpired copy of your Federal or State issued ID (generally a Driver’s license or Passport).
  3. Information for Important Business Decision Makers, Senior Officers and or anyone that has substantial control even if they have no ownership percentage – (Same Information as for Business Owners.
  4. For businesses formed January 1, 2024, or later you also need to report the information listed above for up to two Company Applicants (the information on the person/people who formed the entity for you).

 

How often do I need to file?

If any of the 51 points of information filed with the Treasury changes, you have 30 days to report the changes or face substantial penalties.  Even if this is several times a year.

Some of the data points include updates to addresses, changes in ownership, issuance of new form of ID.

 

What are the penalties?

The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $591 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.

 

Will you file these forms for us?

Since this is not an accounting service, we have partnered with a company to help us help you with these filings.

If you would like to engage our firm to file these reports for you, please respond to this email so that we can send you the engagement letter and invoice to start the filing process for you.

Clients with complex ownership structures should contact their attorney for a legal analysis of who the beneficial owners are.  

What is the Fee for Filing?

Our fee for filing these forms on your behalf is $500 per reportable entity (as tracked by EIN) per filing.   If you choose to engage us, we will need your information no later than December 1st to ensure time to properly file your reports.  Information received after December 1st cannot be guaranteed to be filed by the January 1st deadline – there are no extensions. This represents the time needed to accurately and completely file the report(s) with FinCen.

If you are required to file multiple reports, again, this fee is per filing.  The FinCen system does not have a log in to update information, each report will need to be filled out in its entirety each time there is an update or change.

FinCen does not currently charge a filing fee. 

Can I file myself?

Yes.  The treasury department has provided a guide for you to read to accurately complete the filings.  It is recommended that you read all 57 pages of the filing guide prior to filing your report.

https://fincen.gov/boi/small-entity-compliance-guide

There is also a Frequently Asked Questions Resource at:

https://fincen.gov/boi-faqs

After reading the instructions you would file your report using the following link:

https://boiefiling.fincen.gov/

You should print a confirmation of your filing once completed and save it for your records.

Caution should be exercised as it is very easy to incorrectly complete the form.

Fraud

The FinCen system is a secure filing system under the Department of Treasury much like the IRS.

Be wary of any company that is soliciting your information via mail and do not provide your information to anyone other than your trusted legal or accounting advisor or directly to FinCen.  Many of these requests are fraudulent.

The letters often appear to be directly from FinCen but they are not and are after your personal and business information.

What to do next?

If you wish to engage us to prepare these report(s) for you, please reply to this email.  We will then contact you with an engagement letter, payment information and a data gathering form to complete so that we have the appropriate information to file.

 

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Welcome to Tax Season!

The official start of the tax filing season is quickly approaching!

We are constantly upgrading our processes and seeking ways to better serve you.

In preparation for the 2023 filing season, we have enhanced some of our procedures:

  • The deadlines for submission of tax information/documents to CHVL for 2023 returns are as follows:
    • Partnership and S Corporation is February 15, 2024
    • Individual/Personal returns is March 15, 2024
  • We encourage you to submit your complete tax information/documentation to us as soon as possible.  Files submitted after these dates will automatically be put on extension if we have a signed engagement letter, and your return will be completed within 4 weeks of receiving all your documentation.
  • To be more efficient, we will only begin working on returns once all supporting documentation is received, including but not limited to:
    • W-2, 1099, 1098, K-1 etc.
    • Federal and State estimated payments made for tax year 2023 if not done by CHVL.
    • Itemized expenses– please provide a listing of expenses, you do not need to send individual receipts, stubs etc. You can keep those for your records. Itemized expenses include:

o   Medical, Dental & Vision bills

o   Charitable contributions

o   Non-Cash donations

  • Date of donation
  • Name and Address of the 501(c)3 Organization that received the donation.
  • Brief description of the donation
  • Fair market value of the donation
    • For Schedule C filers, please provide business expenses by category such as meals, gas, travel, supplies, postage etc.
    • For those participating in the healthcare marketplace provide a copy of the form 1095A
    • For those filing in a state with a health mandate please provide a copy of your form 1095B

Additional filings may be required it you have had any of the following transactions in 2023:

  • if you directly or indirectly hold any interest or signatory authority in any assets in a foreign country.
  • if you have received, sold, exchanged, or otherwise acquired any virtual currency.
  • if you have made any gifts totaling more than $17,000 in value.

If you had any of these transactions, please let us know so we can review the additional reporting with you.

To help assist you in collecting and reporting information necessary for us to prepare your 2023 income tax return, we have attached a 2023 Tax Return Questionnaire to this email, we will add a personalized organizer to your Smart Vault containing your 2022 tax information by the end of the week.

As always, we are here to answer any questions you may have please contact us at officemanager@chvfirm.com.

 

Thank you for entrusting us with your tax preparation and filing, we truly appreciate your business.

The Cronin, Hanley, Van Zile & Lorenzo Team

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Attention – New Business Filing Requirement starting Jan. 1, 2024

Attention – New Business Filing Requirement starting January 1, 2024

Starting January 1, 2024, most businesses will have to file a “Beneficial Ownership Information” report with the Financial Crimes Enforcement Network (FinCen). This requirement is based on the Corporate Transparency Act passed by congress in 2021. This is a new filing and is in addition to any filings you may already be sending into the FinCen.

Who needs to file:

This filing is for businesses to report information about their beneficial owners, i.e., the individuals who ultimately own or control the company.

When to file – initial filing:

If your company was created or registered prior to January 1, 2024, you will have until January 1, 2025, to report BOI.

If your company was created or registered on or after January 1, 2024, and before January 1, 2025, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier. Some lawmakers are currently seeking a delay to these deadlines.

If your company is created or registered on or after January 1, 2025, you will need to file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.

When to file – subsequent filings:

Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days.

Some examples of this are:

  • a change in beneficial ownership or officers at the company.
  • a change would be a shareholder that is a minor reaching the age of majority.

What is reported:

For each beneficial owner and/or company officer you will need to provide:

  • Full legal name
  • Date of birth
  • Complete current address
  • Unique identifying number and issuing jurisdiction from, and image of, one of the following non-expired documents:
    • U.S. passport
    • State driver’s license
    • An identification document issued by a state, local government, or tribe.
    • If an individual does not have any of the previous documents, a foreign passport.

Non-Compliance:

The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000.

Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.

Additionally, a person may be subject to civil and/or criminal penalties for willfully causing a company not to file a required BOI report or to report incomplete or false beneficial ownership information to FinCEN.

Next Steps:

  1. Log into the FinCen website to review the filing information that you need:
    https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf
  2. File your report with the FinCen Agency
    Note – this is not a tax return, business owners need to go online and make these filings, this will not be prepared as part of your tax returns.
  3. You may want to inform your contractors and small business vendors about this requirement as well to protect them from being noncompliant.

Additional Help:

https://www.fincen.gov/boi-faqs

If you have any questions, please give the office a call.

 

Thank you,

The Cronin, Hanley, Van Zile & Lorenzo Team