It is important to us at Synergy Tax & Accounting to keep you informed of important compliance requirements. One of the recent changes affecting many businesses is the requirement to file a Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN). While some companies are exempt, a large portion of small businesses will need to file this report. We will break down who needs to file, some of the businesses that are exempt, what information you need to gather, and how to navigate this new requirement.
Who Needs to File?
If your business was formed by filing business formation documents with a secretary of state or similar office, you may need to submit a BOI report. In simple terms, this will almost always include small business operated as partnerships, corporations, LLCs, and other similar business structures. Think businesses that have fewer than 20 employees and less than $5 million in gross receipts. Also, in addition to the traditional business tax returns, if you file a Schedule F (Farm), Schedule C (business that is operated as a sole proprietorship or single member LLC), Schedule E (rental property) you may be required to file if they registered to do business in the US by filing a document with a secretary or state or similar office.
Another requirement to stay in compliance with this BOI reporting is to keep your filing up to date with any information that changes. If any ownership changes occur or the addresses of either the business or the beneficial owners change, the BOI must be updated within 30 days of the change.
The current deadline for existing businesses is December 31, 2024. Moving forward, new businesses formed on or after January 1, 2025, will have 30 calendar days to file a BOI with FinCEN.
What is a BOI Report?
A BOI report is a new filing requirement for many businesses, designed identify the beneficial owners of companies across the United States. It is important to follow this reporting requirement to avoid penalties.
The BOI report must include specific information about the beneficial owners, which generally means those who own or control at least 25% of the company or have significant influence over business decisions. For many businesses, this will mean filing information on owners, officers, and anyone with substantial control.
Exemptions: Is Your Business Excluded?
The good news is that some businesses are exempt from the BOI filing requirement. In total, there are 23 specific exemptions, covering certain industries and business types. Here are a few examples of businesses that may not need to file:
- Banks and credit unions
- Insurance companies
- Securities brokers or dealers
- Accounting firms
- Tax-exempt entities (such as nonprofits)
- Large businesses that have more than 20 full-time employees and have more than $5 million in gross receipts and are operating a business in the US.
The list goes beyond these six examples, the complete list can be found in the BOI Small Compliance Guide at https://www.fincen.gov/boi/small-entity-compliance-guide.
What Information Do You Need to File?
If you determine that your business is required to file a BOI report, you’ll need to gather some essential information. Here’s what you’ll need:
- Full Legal Name of your business
- Any Trade Name or “Doing Business As” (DBA) Name if applicable
- Current U.S. Street Address where the business operates
- State, Tribal, or Foreign Jurisdiction of Formation (where the business was formed)
- Internal Revenue Service Taxpayer Identification Number (TIN) or Employer Identification Number (EIN)
- State or Tribal Jurisdiction of First Registration (if a foreign reporting company)
This information will need to be submitted to FinCEN through their filing portal, which you can access here: https://boiefiling.fincen.gov/. It’s essential to make sure all information is accurate to avoid potential penalties.
Why This Matters for Your Business
Failure to file a BOI report if required can lead to fines and penalties. We understand that these new requirements may feel overwhelming, especially for businesses already balancing multiple compliance obligations. That’s why we’re here to ensure you’re fully informed.
We know you work hard, and we’re here to work alongside you. Whether you’re navigating new regulations, planning for tax season, or thinking about the future, Synergy Tax and Accounting is here for you. Let’s tackle these requirements together so you can focus on what you do best—running your business.
