Beneficial Ownership Information (BOI) Reporting | What You Need To Know

Small Business Tax Savings Podcast

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Business owners are now facing a new reporting requirement called Beneficial Ownership Information (BOI) reporting. In this episode, Christina from Tax Bandits provides a comprehensive guide on BOI reporting, explaining what it is, who needs to file, how to file, and the potential penalties for non-compliance. Christina shares practical advice and examples to help business owners understand and comply with this new requirement.

[00:00:00 - 03:59] Introduction to BOI Reporting

• A new requirement for many small businesses across the United States
• Mandated by the Corporate Transparency Act, starting January 1, 2024
• Designed to help law enforcement identify real owners of companies and prevent financial crimes

[04:00 - 06:13] Who Needs to File and Exemptions

• Most small businesses are required to file unless they fall under one of 23 specific exemptions
• Common exemption (21st exemption) for large operating companies:
  • More than 20 full-time employees in the U.S.
  • A physical office in the U.S.
  • Over $5 million in gross receipts reported on U.S. federal tax returns

[06:14 - 09:12] Information Required and Filing Process

• Company information: name, EIN, address, registration location, domestic/foreign status
• Beneficial owner information: name, FinCEN identifier (if available), or date of birth, address, and valid ID
• Filing can be done through services like Tax Bandits or directly through FinCEN
• Tax Bandits offers a user-friendly interface and record-keeping features

[09:13 - 15:25] Deadlines, Penalties, and Costs

• Deadlines:
  • Existing businesses (before Jan 1, 2024): Must file by January 1, 2025
  • New businesses (registered on/after Jan 1, 2024): 90 days to file
  • New businesses (registered on/after Jan 1, 2025): 30 days to file
• Penalties for non-compliance:
  • Civil penalties: Up to $960,591 per day
  • Criminal penalties: Up to $10,000 fine or 2 years imprisonment
• Costs for filing (via Tax Bandits):
  • One-time filing: $49
  • Lifetime reporting: $199 for one entity (recommended option)

[15:26 - 20:50] Final Thoughts and Recommendations

• BOI reporting is not an annual filing, but updates are required when information changes
• Four types of reports: Initial, Corrected, Updated, and Newly Exempt
• Importance of filing promptly to avoid penalties
• Recommendation to use Tax Bandits for easier tracking and management of BOI reports

Direct Quotes:

"The BOI report requires that many small businesses submit this beneficial ownership information report to FinCEN. Basically, submitting this information is helping law enforcement to identify real owners of companies versus, preventing financial crimes that are happening through some not so savory means there.” – Christina Wright, Tax Bandits

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

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