There is a crucial update that business owners need to be aware of. This update affects all business owners outside of sole proprietorship owners. So, if you are a freelancer, self-employed, or contractor, this doesn’t apply unless you have filed an LLC.
If you have an established entity such as an LLC or S-corp, the FinCEN (Financial Crimes Enforcement Network) is requiring all entities to file a BOI report this year or the penalties will be gruesome. This became an official legal requirement as of January 1, 2024. This came forward due to the Corporate Transparent Act. This act was set in place to stop the ongoing money laundering and tax fraud crimes that are taking place in America.
What is a BOI Report?
A Beneficial Ownership Information (BOI report) is a report that has specific personal information about the entity’s owner. This information does not only include the direct owner but any partial owners as well. If they own 25% or more of the company, they have to be included in that report. The size of the business doesn’t matter, it could be a huge corporation or a small local business owner, and the responsibility remains the same.
This report is supposed to help prevent financial crimes that not only put the average person at risk for their safety but expose vulnerabilities to small business owners who want to experience the American Dream. There are so many popular money laundering shows and even though some find it entertaining, it’s very dangerous in real life. There are people creating shell companies to look like official businesses but they hide the true intention of the entity.
Who has to File a BOI Report?
People who own a business reporting company. In the era of side hustles, also called the gig economy, it’s important to explain who exactly is the BOI for. The BOI is for those who have filled an entity that is under an LLC, Partnership, Cooperation, or S-Corp. Most gig workers and freelancers are self-employed i.e. sole proprietorship.
During the pandemic a lot of citizens decided to go into business and start an LLC, this was primarily due to lack of work, being stuck in the house, or the pandemic benefits that were provided to business owners to compensate their employees and prevent laying them off. These incentives unfortunately have backfired on many business owners who did not properly use the funding or lied to receive the money.
How to File a BOI 2024 Report?
You can file a Business Ownership Information report by going to FinCEN’s site. The cost of filing the report is Free. Business owners could hire a CPA or for larger more complex companies, they could hire an attorney to fill the information out correctly preventing any possible mistakes. Business owners could also file this form on their own, however, because it’s such a crucial document it would be more effective to receive help.
Choosing entrepreneurship is an amazing up-and-down journey that has set individuals free and has helped them create jobs for individuals to provide for their families and pay for their needs. It’s important to remember that this form is not to make legal business owners afraid but to protect their best interests.
When is the BOI deadline?
The BOI report has two different deadlines depending on when the business entity was filed. If the business was filed before 2023, businesses have until December 2024, to get their documents ready and file their BOI report. If the business owner files a business entity in 2024, the business owner has up to 90 days max to file. By 2025, entities will have only 30 days to file their BOI report before consequences start occurring.
There are huge penalties if business owners do not file in time. The penalty from the deadline starts at a $500 fine which will be charged daily up to $10,000 and up to two years in jail. Since these are very big consequences it’s important to follow instructions and protect your business and yourself.
Stay Updated with Beck + Ibarra
If you need help filing your BOI 2024 report or have questions about the quick changes in the financial world, it’s crucial to stay up to date with all that’s going on. Here at Beck + Ibarra, we take financial knowledge seriously. We want to help our readers and clients with what they need to the best of our ability. Stay connected with us so you can learn more about your finances and protect your business entities.
