Understanding the Corporate Transparency Act (CTA) and BOI Reporting: What You Need to Know
The Corporate Transparency Act (CTA) introduces significant changes in how businesses disclose their ownership information. Designed to combat money laundering and enhance transparency, this law requires businesses to file Beneficial Ownership Information (BOI) reports with FinCEN (the Financial Crimes Enforcement Network). However, a recent Texas court decision has temporarily halted enforcement of this rule nationwide, adding complexity to an already critical compliance process.
Here’s what you need to know:
What Does it Mean to Outsource Bookkeeping?
Outsourcing bookkeeping involves hiring specialized financial professionals or firms to manage your business’s bookkeeping needs. These experts streamline your processes by handling tasks like setting up QuickBooks rules, creating monthly reports, and preparing for annual compliance like BOI reporting.
Key Points About BOI Reporting:
- What is BOI Reporting? BOI reporting requires businesses to disclose details about individuals who own or control at least 25% of the business. This includes name, address, and identification information.
- Who Needs to File? Most LLCs, corporations, and other small entities must file. However, there are exemptions for entities like publicly traded companies or highly regulated industries (e.g., banks)
- When is the Deadline? BOI reports are due by January 1, 2025, for entities existing as of January 1, 2024. New entities created after this date have 90 days to file.
- Recent Legal Developments: A Texas court issued a temporary injunction halting enforcement of BOI requirements nationwide. While this might delay compliance temporarily, it’s critical to stay informed, as this injunction could be overturned
- Why Does it Matter? Non-compliance with BOI reporting could result in penalties, and proper filings promote transparency and trust for your business.
How Outsourced Bookkeeping Helps With BOI Compliance
As compliance deadlines approach, an outsourced bookkeeper can help you stay ahead by:
- Ensuring your financial records are well-organized and ready for audits or filings.
- Gathering necessary data efficiently, saving you time and avoiding costly penalties.
- Providing expertise in navigating the nuances of compliance and changes in regulations.
What Now?:
CTA compliance can be overwhelming, but you don’t have to face it alone. At Fisher Bookkeeping, we specialize in outsourced bookkeeping to help businesses like yours prepare for annual compliance requirements, including BOI reporting. Schedule a consultation with us today to ensure your records are accurate, up-to-date, and ready for filing!
Stay informed and proactive to navigate these changing regulations with ease. For more information on BOI reporting and its impact on your business, check out this helpful article on what type of information KPIs provide here
About the Author Barb Fisher
Barb is the CEO of Fisher Bookkeeping, an outsourced bookkeeping consultancy that provides small businesses with a full-service financial department. Her favorite aspect of work is to break down the accounting to meaningful bits, so entrepreneurs can make a powerful difference in their own business. She's also a power lifter (squat: 215, DL: 270).