Beneficial Ownership Information Reporting Is Now Required
Starting on January 1, 2024, Beneficial Ownership Information (BOI) reporting is now required by the Corporate Transparency Act. Many small businesses will be required to file a report under the BOI reporting requirements. BOI reports will be filed with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).
If your company is required to file a BOI report, the due dates are as follows:
Initial reports for companies that existed before Jan. 1, 2024 are due on or before Jan. 1, 2025.
New companies formed after December 31, 2023 have 90 days to file their BOI from the date they are formed.
If your company is required to file a BOI report, it must be filed once, then only filed again if there are changes. It is not an annual reporting requirement.
FinCEN created a Small Entity Compliance Guide to assist companies in determining if they are required to file. An informational page is available here, and a FAQ’s are available here. Reports can be filed with FinCEN here.
As noncompliance with this filing requirement can result in penalties and possible imprisonment, I strongly encourage you to review your company’s filing obligation under these new rules as soon as possible. The BOI filing is outside of the scope of our normal tax and financial reporting engagements and thus, we will not handle filing the BOI reports but wanted to make you aware of the new filing requirement.
Changes In Ohio Commercial Activity Tax Take Effect In 2024
Sweeping changes are coming to Ohio’s Commercial Activity Tax (CAT) in 2024. After nearly twenty years without inflationary modifications, Ohio will no longer impose the annual minimum tax and has modified the annual exclusion. In addition, the new minimum tax threshold is much higher than the previous $150,000.
The Ohio Department of Taxation has created a page dedicated to explaining the changes including an FAQ section here, and an information release here.
Please feel free to reach out to us if you have any questions on these updates.
IRS updates frequently asked questions about Form 1099-K
The Internal Revenue Service today updated frequently asked questions (FAQs) for Form 1099-K, Payment Card and Third Party Network Transactions, in Fact Sheet 2022-41. The updates include:
- Definitions
- General information
- Individuals
IRS Delays Implementation of Lower $600 1099-K Reporting threshold for 2022
The Internal Revenue Service today announced a delay in reporting thresholds for third-party settlement organizations set to take effect for the upcoming tax filing season.
As a result of this delay, third-party settlement organizations are not required to report tax year 2022 transactions on a Form 1099-K to the IRS or the recipient for the lower, $600 threshold amount enacted as part of the American Rescue Plan of 2021.
The IRS released guidance today outlining that calendar year 2022 will be a transition period for implementation of the lowered threshold reporting for third-party settlement organizations (TPSOs) including Venmo, PayPal and CashApp that would have generated Form 1099-Ks for taxpayers.
IRS Releases Updated Tax Gap Estimates
The IRS released a new set of tax gap estimates on tax years 2014 through 2016 showing the estimated gross tax gap increased to $496 billion, a rise of more than $58 billion from the prior estimate.
Underreporting income remains the main contributor to the gap at nearly $400 billion of the $496 billion total. Income from digital assets and crypto currency are identified as areas of noncompliance. The IRS uses this information to direct its compliance resources.
Click here to read the IRS information page.
The full 36-page report can be found here.
Beneficial Ownership Reporting Requirement on the Horizon
The Financial Crimes Enforcement Network, a department of the U.S. Treasury, recently published a new reporting requirement for certain businesses beginning in 2024. Certain businesses will be required to report beneficial owners of the company. These include not only the officers and owners of companies, but also individuals that are able to exercise substantial influence over major decisions. A fact sheet is available here.
