Category: 2024

Corporate Tax Transparency

Starting on January 1, 2024, new rules go into effect under the Corporate Transparency Act to prevent anonymous business entity ownership by requiring companies to report their “beneficial owners” to the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

The new regulation does apply to entrepreneurs, small business owners, and larger companies to prevent money launderers, fraud, and others from hiding their identities in “shell companies”. This will affect up to 30 million small businesses, including Single Member LLCs filing a Schedule C.

Major Points about this new act:

• A beneficial owner is anyone who has substantial control of the company and/or owns or controls at least 25% of the company.
• Exemptions for the new reporting requirement:
  • Filing is not required if the entity has more than 20 full-time employees, has a physical office in the US, and has filed a tax return with more than $5 million in gross receipts.
• FinCen will start accepting applications on January 1, 2024.
• Any entity (business) formed January 1, 2024 or later will have 30 days to file the report.
• Any entity (business) formed prior to January 1, 2024 must file by January 1, 2025.
• The report to be filed is called the “Beneficial Ownership Information” (BOI) and this filing will need to be included in the list of things to do when starting and maintaining a business.
• Failure to file will result in a penalty up to $500 per day, maximum $10,000 and/or up to two years in jail.
• You may request a unique FinCen Identifier on or after January 1, 2024 prior to filing, when filing, or after filing.
  • If you request a FinCen Identifier after filing, you will need to submit an updated BOI report requesting the FinCen Identifier.
  • If you would like Guiden Tax to prepare your BOI to FinCEN, you will need a unique FinCEN identifier.
• FinCEN Reporting Website: https://www.fincen.gov/boi
• FinCEN Reporting Instructions: Beneficial Ownership Information Instructions

January 15, 2025 – Fourth quarter 2025 estimated tax payment due. This represents the final quarterly estimated tax payment due for 2024. If you choose the option to pay 100% of your previous year’s tax liability, any unpaid taxes will be due when you file your 2024 individual tax return by the April 2025 deadline.

December 31, 2024 – Required minimum distributions have to be taken for individuals age 73 or older by the end of 2024. After taking your first RMD (for 2023) by April 1, 2024 if you turned 73 in 2023, you also need to take your 2024 RMD by the end of the year. This is also the deadline if you are otherwise required to take an RMD for 2024.

October 15, 2024 – Deadline to file your extended 2023 tax return. If you chose to file an extension request on your tax return, this is the due date for filing your tax return.

September 16, 2024 – Third quarter 2024 estimated tax payment due.

June 17, 2024 – Second quarter 2024 estimated tax payment due. Despite the IRS referring to these payments as quarterly estimated taxes, the due dates don’t necessarily fall within “quarters” nor do they each represent three months of tax payments. They represent an equal quarterly share of your estimated income tax liability paid at uneven intervals. The first payment occurs 3 and a half months into the year. The second payment is five and a half months; the third payment is eight and a half months, and the fourth payment is due 12 and a half months after the year starts.

April 15, 2024 – First quarter 2024 estimated tax payment due. Making estimated tax payments means that you need to estimate how much income you’re likely to make for the year and determine how much you will owe to the IRS for income taxes. You can use IRS Form 1040-ES to calculate how much tax liability you’ll have for the year. IRS Publication 505 contains all the rules and details you might need to know about how to calculate this amount. If you overestimated how much tax liability you’d owe for a year and are due a refund, you can choose to receive that money now or apply the overage to the following year’s quarterly tax payments.

April 15, 2024 – Deadline to File Form 4868 and request an extension. The tax day deadline is also the last day to file Form 4868 requesting an extension to file your individual income tax return. If you won’t be ready to file your tax return by tax day, make sure you instead complete an extension request, granting you the ability to delay filing a completed return until October 16, 2023. But remember, even if you choose to file an extension, you are still required to pay any taxes you may owe by the April deadline.

April 15, 2024 – Tax day (unless extended due to local state holiday). The tax deadline typically falls on April 15 each year, but can be delayed if it falls on a weekend or holiday. Missing the tax deadline can have consequences like penalties and interest.

April 1, 2024 – Required minimum distribution due if you turned 73 in 2023. If you turned 73 in 2023, you have until April 1, 2024, to take your 2023 required minimum distribution (your first required distribution) from your retirement account. After passage of the SECURE Act 2.0 in 2022, if you turned 73 years old on or after 2022, you don’t need to take RMDs until you reach age 73