The Corporate Transparency Act (signed into law on January 1, 2021) expanded anti-money laundering laws and created new reporting requirements for certain companies doing business in the US Beginning in 2024, many small businesses are required to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN) in an effort to create a national database for use by national security and law enforcement agencies to prevent the use of shell companies for criminal activity.
 
Who Must File.
Both domestic and foreign reporting companies are required to file reports. A company is considered a reporting company if a document was filed with the secretary of state (SOS) or similar office to create or register the entity. Corporations (including S corporations), LLCs, and other entities formed through the SOS are subject to the reporting requirements. But, because sole proprietorships, trusts, and general partnerships do not require the filing of a formal document with the SOS, they generally are not considered a reporting company and will not have a filing requirement. Foreign companies are required to file reports if they are registered with the SOS or similar office under state law.
 
Some companies are exempt from reporting, but many of the exempted companies are already required to report ownership information to a governmental authority. Of particular interest to you may be the exemption for large operating companies. A large operating company is any entity with (a) more than 20 full-time US employees, (b) an operating presence at a physical office within the US, and (c) more than $5,000,000 of US-sourced gross receipts reported on its prior year federal income tax return. If you meet these qualifications, you are not subject to the new reporting requirements.
 
What Information Must be Provided.
Beneficial ownership information (BOI) must be reported for the reporting company’s beneficial owners and (for entities formed or registered after 2023) company applicants. BOI includes an individual’s full legal name, date of birth, street address and a unique ID number. The unique ID number can be from a non-expired US passport, state driver’s license, or other government-issued ID card. If the individual does not have any of those documents, then a non-expired foreign passport can be used. An image of the document showing the unique ID number must also be included with the report.
 
Beneficial Owners.
Two groups of individuals are considered beneficial owners of a reporting company: (1) any individual who directly or indirectly owns or controls at least 25% of the ownership interests of the reporting company; or (2) any individual who exercises substantial control over the reporting company.
Individuals with substantial control are those with substantial influence over important decisions about a reporting company’s business, finances, and structure. Senior officers (president, CFO, general counsel, CEO, COO, and any other officer who performs a similar function) are automatically deemed to have substantial control, as are individuals with the authority to appoint or remove senior officers and board members. There is no requirement that these individuals have actual ownership in the company to be a considered a beneficial owner for reporting purposes.
 
Company Applicants.
The company applicant is the person who actually files the document that creates or registers the reporting company (e.g., an attorney). Company applicants must provide the same information that is required of beneficial owners, but only if the reporting company is formed or registered after 2023. Because of the difficulty in tracking down information about company applicants for reporting companies that have been in existence for a number of years, reporting companies formed or registered before 2024 do not have to supply BOI for their company applicants.
 
FinCEN Identifiers.
Individuals and reporting companies can request a FinCEN Identifier (FinCEN ID) to use in place of supplying detailed information on the report. A FinCEN ID is a unique number assigned by FinCEN which is obtained by submitting the same information as is required of a beneficial owner or reporting company. A FinCEN ID may be useful to individuals that prefer to send their personal information directly to FinCEN rather through a reporting company, or to individuals that may be required to supply information as a beneficial owner or company applicant of several reporting companies.
 
Important Filing Dates.
For existing reporting companies created or registered before 2024, the initial report is due by January 1, 2025. For reporting companies created or registered in 2024, the initial report is due 90 days after the entity’s creation or registration. For reporting companies created or registered after 2024, the initial report is due 30 days after the entity’s creation or registration.
 
If there is a change to previously reported information about the reporting company or its beneficial owners, an updated report must be filed within 30 days of the change. So, it is imperative that your company implement a system to identify reportable changes and file an updated report with FinCEN in a timely manner. The penalties for willfully failing to file both initial and updated reports are steep-$500 per day that the report is late, up to $10,000 and imprisonment for up to two years.
 
How to File.
BOI reports must be filed electronically. FinCEN’s e-filing portal, available at https://boiefiling.fincen.gov/, provides two methods to submit a report: (1) by filling out a web-based version of the form and submitting it online, or (2) by uploading a completed PDF version of the BOI report. Some third-party service providers may also offer the ability to file the BOI report through their software. The person who submits the BOI report will need to provide their name and email address to FinCEN. There is no fee for filing the report.
 
If you have any questions about these new reporting rules and how they affect your business, we would be happy to discuss them with you and provide you with recommendations for legal counsel assistance. FinCEN also has a Small Entity Compliance Guide and frequently asked questions to help guide businesses through the reporting requirements. These are available at https://www.fincen.gov/boi/small-business-resources.

We're getting ready to add an office location in Chillicothe! Hopefully construction is finished on the big remodel project happening downtown Chillicothe! We can't wait to join the Arts District on Locust Street! More details to be announced soon! 

The new minimum wage increase in Missouri...If you're an employer in retail or service industries and your gross annual income is less than $500,000, this increase to your employees is not mandatory. Previously, the minimum wage was $7.85/hour; effective January 1, 2019, this is increased to $8.60/hour. There will be an annual increase each January until it reaches $12.00/hour in 2023.
Remember though that pay for tipped employees is required to be at least 50 percent of the minimum wage. Employers should adjust those employees' pay to bring the employee’s total compensation each period to equal at least the state minimum wage of $8.60/hr.

I read an article earlier today and realized it was right on the mark with what I've been thinking about recently. Is your business compliant with your state's human resource rules? Does this make you a little sick to your stomach to think about? Are you paying at least minimum wage? Have you updated your personnel files? Do you have personnel files? If yes, how long should you keep those files? Do you have an employee handbook? Has the handbook been updated in the last couple years? What kinds of questions do you ask during an interview with a prospective employee? With the Affordable Care Act, are you sure you're offering the benefits required and handling payroll calculations correctly? Are you enrolled in E-Verify to confirm employment eligibility when hiring a new individual? If it sounds like I'm speaking a foreign language, give us a call to discuss these important issues. 

This morning I was reading an article in accounting today by Darren Root (Vol. 28, No. 10, October 2014), discussing the Great American Accounting Opportunity. I'm not going to bother you with my opinion on why this profession is a great one. I do however want to share a quote with you. 

Today's small firms are all about creating a powerful brand, a compelling Web and mobile strategy, and adopting technology that supports working from anywhere, anytime, and on any device. From a client prospective, these firms are focused on higher-value advisory services -- not merely serving as technicians, pumping out tax returns. They are educating small-business clients on using advanced technologies, implementing highly efficient processes, and long-term strategic planning. 


The accounting profession and the firms you see around town are changing. CPAs are not being viewed as merely bean counters. CPAs are trusted advisors who offer so much more than a correctly formatted financial statement. It's an exciting time in the profession. Smaller firms account for approximately 99% of all accounting firms and I'm so excited to be one of those. Working with my clients to help train them and make their businesses efficient and profitable. 

Now that it's back to school season, let's think about ways education can save you money on taxes...and a few ways it can't.
1. Private school tuition is not deductible on your individual tax return. If there's a daycare portion though, and you can split it out, that could be deductible for children up to 13 years old.
2. Clothing is not tax deductible. Sorry folks. Even if a particular uniform is required by the school.
3. Buying those football cards from the players for their fundraiser? The benefit received from use of the card likely exceeds the cost of the card. Not deductible.
4. Moving expenses are deductible, right? Nope. Not if moving your child to college.
5. Hopefully you've saved tuition money in a 529 plan as the earnings are not taxable but if you have to get a student loan, the interest paid is deductible up to a certain amount each year as long as your income isn't too high according to the IRS.
6. For the Education Credits & Deductions, typically tuition, required supplies & books count as eligible expenses. Not room and board, fuel for trips home, etc. Keep those receipts!
Other questions???? Give me a call.

Just announced is that only one IRA rollover is allowed tax-free per year per taxpayer beginning in 2015. If IRA funds are distributed and rolled over into another IRA account within 60 days, the distribution is typically considered tax free and is not subject to penalties. Current publications indicate this can happen on an IRA by IRA basis. New interpretations though say these IRA accounts must be aggregated. Let us know if you're considering an IRA rollover so you're aware of potential tax consequences. Click for more details!

And of course they've changed their minds. Trustee to trustee transfers do not constitute a roll-over per new interpretations of the IRS thus the rules stated earlier do not apply. As always, be sure to contact us to determine probable tax treatment before making investment decisions. Regulations change frequently.

Effective at the end of May, 2014, all versions of QuickBooks 2011 will lose its support from Intuit. What does this mean for you? If you have a technical problem, Intuit will no longer provide technical support to you. If you use any of the add-on services with your license, those will not be available to you. This includes payroll, payments & online banking. In order to avoid problems with your system and a disruption in paying your employees & vendors, an upgrade is necessary. I can offer a new version to you at a substantial discount as well as file conversion & training! Give me a call to discuss!

With the popularity in today's world of working remotely over the internet, chances are you're either managing employees working from home now or will shortly be approached by a potential employee wishing to do so. Traditional mindsets usually shy from this type of employee due to the perceived lack of control over the situation. It's important to remember that not every employee thrives under the traditional arrangement. Giving parents of young children, for example, the opportunity to work with a flexible schedule allows them greater satisfaction with their work. This in turn will provide the employer with increased output and employee loyalty. To manage remote workers though, and keep the worker connected to the company and their peers, there must be some guidelines set. Distinct goals, scheduled check-ins, and staff meeting attendance either by phone or via an online meeting. Frequent communication is key.

I received this link in an email from the American Institute of CPAs late last week. After having such a great Mother's Day weekend and remembering a few conversations I've had over the years, I wanted to share with you the importance of being prepared. The article focuses on the female in relationships but it could easily apply to the other party as well. In a marriage, or in a business, you need to always be prepared for the unexpected. It's impossible to know what's going to happen next month or tomorrow and education and preparedness is crucial. Business owners must prepare contingency plans so employees and managers, spouses, are not left scrambling in the event of a death, trying to figure out who is in charge and how the show was ran. Spouses, you should share financial information and keep records organized in a safe location. Life insurance policies, bank documents, deeds, titles, stock certificates...stored in a secure, fireproof location or scanned and stored on a password-protected computer. Invite along your spouse to ask questions at meetings with me, your investment advisor, or attorney. I know it's often difficult to remember all the details of these conversations and trying to relay the information at the end of the day can be confusing.

So this is my first attempt at creating a website. I hope you all find it not just a place to look up our phone number, but also a place to find information about changing tax laws and their impact on your returns, a place to schedule appointment, and a place to interact and participate. Let me know your thoughts, and please share any requests!