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Beneficial Ownership Information (BOI) Reporting and Unreimbursed Expense Deduction for Educators

Beneficial Ownership Information (BOI) Reporting - What is it and how does it apply to me and my business?

The Corporate Transparency Act (CTA) went into law in January 2021 and the reporting requirements begin January 1, 2024. It requires US entities doing business in the US to report information on their beneficial owners and the individuals who created the entity. The CTA was intended to fight against money laundering, shell companies, fraud, etc. Generally, any corporation, LLC, or any other entity that was created by filing a document with the secretary of state and is registered to do business in the US will be a “reporting company”. They expect that small businesses and those under simple management will be a majority of the filers. Entities exempt from this filing:

  • Large operating companies – employ more than 20 people, reported more than $5 million in gross receipts, and operate in the US

  • Publicly traded companies

  • Banks

  • Insurance companies or insurance producers

  • Investment advisors/companies

  • Accounting firms

  • Securities brokers, dealers, etc

  • Tax exempt entities

  • Utility companies

  • Inactive entities (not engaged in business, hasn’t sent more than $1,000 through a bank during the year)

Information that will be required to be reported for each individual owner:

  • Full name

  • Date of birth

  • Current address

  • ID number from a passport or drivers license, including a copy of that document

A beneficial owner is one who:

  • Exercises substantial control over the company, or

  • Owns or controls at least 25 percent of the company

A company created on or after January 1, 2024, must file the initial report within 30 days of creation. A company in existence before January 1, 2024 will need to file their initial report no later than January 1, 2025. A reporting company must file an updated report within 30 calendar days after any change occurs to the previously submitted report. Penalties; Willful failure to report may result in a civil penalty of up to $500/day and a criminal penalty of up to $10,000 and/or imprisonment of up to 2 years. So, they are pretty serious about making sure these filings occur. The AICPA is lobbying for the delay of this law – mainly concerned that many business owners are unaware of this filing requirement. We will keep you posted on any developments, but we just wanted you to be aware of this new filing requirement for 2024 and beyond.

Unreimbursed Expense Deduction for Educators

School is just around the corner and many teachers are getting their classrooms ready. Unfortunately, a lot of times, this means paying for things out of their own pocket for supplies for the new year. The Educator Expense Deduction allows a teacher (or teachers) to deduct up to $300 ($600 if married filing jointly and both spouses are educators) on your personal return for 2023. This is the second year for the higher amount of deduction. Teachers qualify if they:

  • Teach any grade – kindergarten through 12th grade

  • Are a teacher, instructor, counselor, principal, or aide

  • Work at least 900 hours during the school year

  • Work in a school that provides elementary or secondary education

Qualified Expenses:

  • Professional development courses

  • Books

  • Supplies

  • Computer equipment

  • Athletic supplies for health and P.E.

  • Disinfectants, hand soap, sanitizer, disposable gloves and face masks

  • Air purifiers

So, if you are an educator or know one, make sure to take advantage of this tax deduction!

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