Welcome to Tax Insights Podcast, where we break down complex tax topics into bite-sized how-tos. In this episode, Jeff Dvorachek discusses a new 2024 rule for LLCs and similar businesses. This rule requires these entities to file Beneficial Ownership Information with the government by December 31st to avoid significant penalties. Let’s dive in!
On today’s episode of Tax Insights, Jeff explains a new rule for 2024 that affects LLCs and similar businesses. These entities must file Beneficial Ownership Information with the government by December 31st to avoid hefty penalties. This filing is typically a one-time requirement unless changes occur within the business. Tune in to learn how this new regulation could impact your business and ensure you stay compliant.
Host: There’s always deadlines it feels like for individuals or businesses. And that’s kind of what today’s reminder is for those LLCs out there. If I remember correctly, Jeff, they have until the end of the year to register, right? We talked about this back in November, but there’s a lot of things that LLCs have to do to stay compliant, I guess.
Jeff: Right, Terry. There’s a new rule that became effective in 2024 called the Beneficial Ownership Information (BOI) reporting requirement. We’ve sent a lot of information out to our clients on this, and as you mentioned, we talked about it back in November. It’s really important for most LLCs, partnerships, corporations, and other entities to make sure they get this filing done. It’s a first-year filing that can be a one-time thing unless you have changes.
Host: Sure. Now, what happens if you don’t file on time? I would imagine there are just some warnings, right? A little slap on the wrist, no big deal?
Jeff: Just like with anything else involving the IRS, there are penalties. And yeah, Terry, you and I talked before the show—these penalties are actually really high. They’re like $500 per day and can go up to $10,000 for not filing. And that can be applied even to small mom-and-pop LLCs, anything.
Host: Wow, that’s why it’s so important for people to understand the law and why you guys are the experts in this. Because if someone has an LLC and doesn’t follow these rules, they could get hit with a substantial fine, like you were saying.
Jeff: That’s right. And maybe we should talk a little bit about what companies have to do this.
Host: Sure, please do, because I would imagine there are some exceptions, right?
Jeff: There are. So, any company that’s considered a “reporting company” has to file with FinCEN. That’s the Financial Crimes Enforcement Network, which is part of the Department of Treasury. So, you’re working with them on filing these reports. It applies to LLCs, LLPs, corporations, and other entities. For example, if you own a second house and decided to put it in an LLC to protect it, that LLC needs to be filed, or you could face penalties. The deadline for existing entities is December 31st, 2024. For entities started in 2024, you have 90 days from the formation date to file. So, it’s really important to get this done.
Host: Yeah, and again, that’s why I always point people to experts like you. You guys can help people first understand the rules and then actually file, right?
Jeff: Exactly. We’re assisting clients with the filing, but we’re also helping those who want to do it themselves. They can go directly to the FinCEN website, search for “Beneficial Ownership Information,” and find the filing page. But we’re here to help them through the process.
Host: Jeff, great information and great reminders for our listeners. How can they reach out to you and the team of experts at Hawkins Ash?
Jeff: I would suggest going to our website at HawkinsAsh.CPA . There, you can visit the CPA-HQ section for excellent financial tips.
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