7 Things You Need to Know About the New Business Reporting Rules

If you own a small business, a new law could impact how you operate. The Corporate Transparency Act (CTA) took effect in 2024, introducing new reporting requirements that many small business owners must be aware of.

Why it matters: The CTA requires certain businesses to file a Beneficial Ownership Information (BOI) report with the government. If you registered your business with the state, this likely includes you. Let’s break down what you need to know to stay compliant and keep your business on track without stress.

1. What’s the Corporate Transparency Act (CTA)?

The basics: The Corporate Transparency Act (CTA) is a new law designed to increase transparency in business ownership. The goal is to ensure that companies’ real owners and decision-makers are known, helping to prevent illegal activities like fraud or money laundering.

Why it’s important: This law is about maintaining transparency in business operations. It’s not meant to be a burden but a step toward ensuring everyone plays by the rules.

2. What Is a Beneficial Ownership Information (BOI) Report?

Breaking it down: A Beneficial Ownership Information (BOI) report simply lists the key individuals who own or control your business. This includes anyone who owns at least 25% of your company or has significant control over its operations.

What you need to do: If you have business partners, investors, or top executives who meet these criteria, their information needs to be included in the report.

3. Who Needs to File?

Does this apply to you? If your business is structured as an LLC, corporation, or partnership registered with the state, you’re likely required to file a BOI report. This covers most small businesses in the U.S.

Who’s exempt? Sole proprietors, larger companies, and some nonprofits may not need to file. However, if you’ve registered your business with the state, it’s a good idea to check whether you’re required to submit a report.

4. What Happens If You Don’t File?

Staying compliant: Filing your BOI report is essential to avoid penalties. To avoid fines or penalties, you must complete your filing with the correct information by the deadline.

Take action: To avoid issues, ensure you understand the filing requirements and submit your report on time. The goal is to keep your business in good standing.

5. How Do You File the Beneficial Ownership Information (BOI) Report?

Filing made simple: Submitting your BOI report is done online through FinCEN’s secure portal. The process is straightforward, but accuracy is key—mistakes could lead to penalties or require you to amend your report.

Need help? If the idea of filing this report feels overwhelming, you’re not alone. Third-party services are available that can assist you with the process, ensuring everything is done correctly and on time.

6. Important Deadlines to Remember

Key dates: The deadline for filing depends on when you formed your business. 

• If your company was created before 2024, the report is due by January 1, 2025. 
• New companies formed in 2024 have 90 days from registration to submit their BOI report.

The new BOI reporting rules under the Corporate Transparency Act are straightforward but important for small business owners. By staying informed and taking action early, you can ensure your business remains compliant and avoid any potential penalties. Start by familiarizing yourself with the requirements, prepare your report, and use available resources to help you meet the deadlines. Check the TurboTax blog often for recent news, more tips and important updates.