Frequently Asked Questions

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Sirrom Tax chooses not to provide BOI services BOI services are out of our scope and the client has sole responsibility for compliance.

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Effective January 1, 2024, a new reporting requirement goes into effect that will require millions of small businesses to file a Beneficial Ownership Information (BOI) Report with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). 

Congress imposed this requirement in a statute called the Corporate Transparency Act (CTA), with FinCEN issuing the regulation providing the details on who must file a report, when it has to be filed, and what information has to be reported. Every small business owner needs to know about this new reporting requirement as non-compliance can result in severe penalties. 

The CTA requires so called “reporting companies” to file reports with FinCEN identifying the company’s beneficial owners and certain other information. A reporting company is defined to include most entities formed under state law, like LLCs, LLPs, corporations, and others.

Beneficial ownership generally means any of the following: people with substantial control; people with ownership interests, whether indirect or direct, equal to at least 25% of the company’s equity interests; and company applicants.

There are numerous exemptions from the definition of “reporting company.” Below is a list of some of the more notable exemptions:

• Banks, bank holding companies, credit unions, governmental entities, publicly traded companies, insurance companies, public accounting firms, tax-exempt entities.
• So called “Large operating companies” that have 1) a physical office in US, 2) more than 20 U.S. based FT employees, and 3) more than $5M of gross receipts reported on prior federal tax return.

Under current proposed regulations, existing reporting companies have between January 1, 2024, and January 1, 2025 to file with FinCEN, while reporting companies formed on or after January 1, 2024 and before January 1, 2025 must file within 90 days of formation. Entities formed after January 1, 2025, must file within 30 days of formation. Newly formed companies must coordinate with their legal and tax advisors to ensure the proper reporting is completed within the required timeline. 

The initial Beneficial Ownership Information (BOI) report and all updates and corrections will be filed electronically with FinCEN through a system that will be available via FinCEN’s website. There is no fee for filing the reports.

Updated reports are due within 30 calendar days after a change occurs.

Failure to comply with the CTA can result in a $500-per-day penalty (up to $10,000) and possible criminal penalties.

There is no fee for submitting your BOI report to FinCEN.

Access FinCEN’s website for information about BOI reporting.

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Additional Information

The fastest way to get your refund is by filing electronically with direct deposit and avoiding a paper tax return.

Here are other key dates during tax-filing season you should know.

- Tuesday, January 31, Business and companies must provide W-2 forms to employees by January 31, 2023, either electronically or by mail. Reach out to your employer if you don't have your W-2 by early February.

• Unreimbursed employee expenses: A number of employees’ business expenses that weren’t reimbursed by their employers — like classes and seminars — are no longer deductible.
• Moving expenses: Workers moving for a new job were once able to deduct related expenses. That has been wiped away, except for members of the military.
• Tax preparation fees: If you itemized, you could typically deduct the amount your tax preparer charged or similar tax-related expenses, like software bought to file electronically. This is no longer possible, unless you are self-employed.
• Interest on home equity loans or lines of credit are now only deductible if the debt is used to “buy, build or substantially improve” the home that secures the loan. You can no longer deduct the interest if you pay off credit card debt, for example.

Not all taxpayers can take a standard deduction, which is discussed in the Instructions for Forms 1040 and 1040-SR. 

Those taxpayers include:

• A married individual filing as married filing separately whose spouse itemizes deductions—if one spouse itemizes on a separate return, both must itemize.
• An individual who files a tax return for a period of less than 12 months. This is uncommon and could be due to a change in their annual accounting period.
• An individual who was a nonresident alien or a dual-status alien during the year. However, nonresident aliens who are married to a U.S. citizen or resident alien can take the standard deduction in certain situations.

Taxpayers choose to itemize deductions by filing Schedule A, Form 1040, Itemized Deductions. Itemized deductions that taxpayers may claim include:

• State and local income or sales taxes
• Real estate and personal property taxes
• Home mortgage interest
• Mortgage insurance premiums on a home mortgage
• Personal casualty and theft losses from a federally declared disaster
• Gifts to a qualified charity
• Unreimbursed medical and dental expenses that exceed 7.5% of adjusted gross income.

Some itemized deductions, such as the deduction for taxes, may be limited. Taxpayers should review the instructions for Schedule A Form 1040 for more information on limitations.