BOI is definitely the biggest news for our business clients this year!

The Corporate Transparency Act (CTA) establishes uniform beneficial ownership information reporting requirements for certain types of corporations, limited liability companies, and other similar entities created in or registered to do business in the United States. The CTA authorizes the Financial Crimes Enforcement Network (FinCEN) to collect that information and disclose it to authorized government authorities and financial institutions, subject to effective safeguards and controls. The CTA and its implementing regulations will provide essential information to law enforcement, national security agencies, and others to help prevent criminals, terrorists, proliferators, and corrupt oligarchs from hiding illicit money or other property in the United States. The CTA is part of the Anti-Money Laundering Act of 2020 (AML Act).

Summarized information on reporting companies, beneficial owners, and reporting dates include:

Reporting company - the rule defines two types of reporting companies.

Domestic reporting company - A domestic reporting company is a corporation, limited liability company (LLC) or any entity created by the filing of a document with the secretary of state or similar office.

Foreign reporting company - A foreign reporting company is a corporation, LLC or other entity formed under the law of a foreign country that is registered to do business in any state or tribal jurisdiction by filing a document with the secretary of state or similar office.

Beneficial Owner - A beneficial owner includes any individual who, directly or indirectly, either:

• • Exercises substantial control over a reporting company, or
• • Ownes or controls at least 25 percent of the ownership interests of a reporting company.

Reporting Timeline - The effective date for the rule is January 1, 2024.

• • Reporting companies created or registered before January 1, 2024 will have one year (until January 1, 2025) to file their initial reports.
• • Reporting companies created or registered in 2024 will have 90 days to file their initial reports.
• • Reporting companies created on or after January 1, 2025 will have 30 days after receiving notice of their creation or registration to file their initial reports.
• • Reporting companies have 30 days to report changes to the information in previous reports and 30 days to correct inaccurate information after becoming aware of the errors or having reason to know of the inaccuracies.

The tax law changes for the 2023 filing season include several key updates and adjustments that taxpayers need to be aware of.

These changes impact various aspects of tax filing, from standard deductions to specific tax credits and deductions.

Child Tax Credit: The refundable portion of the Child Tax Credit has increased to $1,600. This change is significant for families with children, as it increases the amount they can receive back from their taxes.

Clean Energy and Vehicle Credits: The Inflation Reduction Act has introduced changes to energy tax credits. The Energy-Efficient Home Improvement Credit now allows homeowners to claim 30% of qualifying improvement expenses, up to $1,200 annually. Additionally, the Clean Vehicle Credit provides up to $7,500 for new electric vehicles, and a provision for Used Electric Vehicles offers up to $4,000. For commercial clean vehicles, a maximum credit of $7,500 or $40,000 is available depending on the vehicle's weight.

Standard Deduction: For MFJ $29,200 add $1,550 per person if Over Age 65. Single $14,600 add $1,950 if Over Age 65.

Retirement Plans: The Secure 2.0 Act has brought about changes for retirement accounts. There are new exceptions to the standard 10% penalty for early distributions from retirement accounts. These exceptions include private sector firefighters, public safety officers, state and local government correction officers, terminally ill individuals, and corrective distributions of excess contributions.

Premium Tax Credit: The Inflation Reduction Act extension through 2025 impacts the Premium Tax Credit, a subsidy that lowers the cost of health insurance for individuals and families.

Business Meals Deduction: Now, only 50% of the cost of business meals can be deducted. This is a significant change for those who claim business meal expenses.

Earned Income Tax Credit (EITC): The investment income limitation for the EITC has been increased to $11,000. This change could affect those who are eligible for the credit, particularly those with investment income.

Form 1099-K Reporting: The reporting for Form 1099-K, which is used for reporting payment card and third-party network transactions, will vary depending on the nature of the income source. This change is particularly relevant for those who receive income through platforms like eBay, Etsy, or other online marketplaces.