Hey, business owner! I’m sure you’ve heard about BOI Reports for several months & you probably have a ton of questions. After all, it’s brand new and the information out there is confusing. Below, we’ll tell you everything you need to know about BOI reports and how to file them on your own before the deadline so you don’t go bankrupt paying non-filing penalties.
First: What is a BOI Report?
First things first, let’s explain this acronym. BOI stands for Beneficial Ownership Information. A BOI report is a document that certain businesses need to file with the Financial Crimes Enforcement Network (FinCEN). It’s basically Uncle Sam’s way of keeping tabs on who really owns and controls businesses in the US. Aka, more government oversight (barf).
Think of it as a corporate family tree. The government wants to know who’s sitting at the top of that tree, pulling the strings. Why? Well, it’s all part of an effort to combat money laundering, tax evasion, and other financial shenanigans (so they say).
Do I Need to File?
Now, before you start panicking and thinking, “Oh great, more paperwork!”, let’s see if you actually need to file a BOI report. You’ll need to file if your business is a:
- Corporation
- Limited Liability Company (LLC)
- Other entity created by filing with a secretary of state or similar office
So, just to be clear – most small-midsize business owners fall into this category and need to file.
But wait! There are exceptions. You don’t need to file if your business is:
- Publicly traded
- Heavily regulated (like banks or insurance companies)
- A tax-exempt entity
- An inactive business (formed before January 1, 2020, and meets certain criteria
If you’re still not sure, it’s best to check with a legal professional. Better safe than sorry, right?
What Information Goes into a BOI Report?
Next, we’ll go over what you need to include in your BOI Report. Now here’s the breakdown:
- Company Information:
- Full legal name
- Any trade names or “doing business as” names
- Business street address
- State or Tribal jurisdiction of formation
- IRS Taxpayer Identification Number
- Beneficial Owner Information (for each beneficial owner):
- Full legal name
- Date of birth
- Residential street address
- Unique identifying number (like a passport or driver’s license number)
- Company Applicant Information:
- The same details as for beneficial owners, but for the person who filed the paperwork to create or register the entity
Remember, a beneficial owner is anyone who either directly or indirectly owns or controls 25% or more of the company, or who has substantial control over the company.
How to File a BOI Report: A Step-by-Step Guide
Now for the fun part – actually filing the report! Don’t worry, it’s not as daunting as it sounds. Here’s a step-by-step guide:
- Create a FinCEN account: Head over to the FinCEN website and create an account.
- Gather your information: Remember all that info we talked about earlier? Now’s the time to round it up. Pro tip: Having all this info ready before you start will save you a lot of time.
- Access the BOI filing system: Once you’re logged in to your FinCEN account, navigate to the BOI filing system. It should be pretty straightforward.
- Fill out the form: Enter all the required information. Double-check everything – typos are not your friend here. If you can, have a second set of eyes to review the information.
- Submit the report: Once you’re sure everything is correct, hit that submit button. Congratulations! You’ve just filed your BOI report. That’s it!
Deadlines To File Your BOI Report
Alright, now that you know how to file, let’s talk about when you need to file. Because like your favorite streaming service, this too has a deadline.
- For businesses created or registered before January 1, 2024: You have until January 1, 2025, to file your initial BOI report.
- For businesses created or registered on or after January 1, 2024: You have 30 days from the date of creation or registration to file your initial BOI report.
- For any changes to your beneficial ownership information: You have 30 days from the date of the change to file an updated BOI report.
Mark these dates on your calendar, set an alarm on your phone, tie a string around your finger – whatever it takes to remember! Or, better yet, just do it RIGHT NOW.
Penalties: The Quickest Way to Spend Your Money
Now, I hate to be the bearer of bad news, but there are penalties for not filing your BOI report on time. And trust me, these penalties are not a joke.
- Civil penalties can go up to $500 for each day the violation continues.
- Criminal penalties can include fines up to $10,000 and/or imprisonment for up to two years.
I told you, these penalties are nothing to mess around with. So, again, I say: GO FILE YOUR BOI REPORT RIGHT NOW!!
Tips for a Smooth BOI Reporting Experience
Want to make your BOI reporting as smooth as possible? Here are some tips:
- Start early: Don’t wait until the last minute. Give yourself plenty of time to gather information and file the report.
- Keep good records: Maintain up-to-date information on your beneficial owners. It’ll make future filings much easier.
- Set reminders: Put those deadlines in your calendar and set reminders. Your future self will thank you.
- Stay informed: Keep an eye out for any changes to BOI reporting requirements. The world of regulations is always evolving.
- When in doubt, ask for help: If you’re unsure about anything, don’t hesitate to consult with a legal or financial professional.
Common Questions About BOI Reports
Still have some burning questions? Let’s tackle a few common ones:
- Q: Do I need to file a BOI report every year? A: No, you only need to file initially and then when there are changes to your beneficial ownership information.
- Q: What if I don’t know all the information required? A: You’re required to provide complete and accurate information. If you’re unsure, it’s best to consult with the individuals involved or seek professional help.
- Q: Is the information in my BOI report public? A: No, BOI reports are confidential and can only be accessed by authorized government agencies for law enforcement and national security purposes.
- Q: Can I file a paper BOI report? A: No, BOI reports must be filed electronically through the FinCEN website.
- Q: What if I make a mistake on my BOI report? A: If you realize you’ve made a mistake, file a corrected report as soon as possible. Honest mistakes happen, but it’s important to correct them promptly.
Wrapping Up: You’ve Got This!
And there you have it – everything you need to know about BOI reports, wrapped up in a neat little package. Remember, while it might seem like just another bureaucratic hoop to jump through…you’re probably right – but they will fine the crap out of you until you file it, so just do it.
In all seriousness, staying compliant with BOI reporting requirements is crucial for your business and bank account. It might not be the most exciting part of being a business owner, but it’s an important one. And hey, now you can share this post with all of your business owner friends, so they can file their BOI reports and not drown in financial penalties.
Remember, if you’re ever unsure about anything related to BOI reporting, don’t hesitate to seek professional advice. It’s always better to be safe than sorry when it comes to regulatory compliance.
By the way, we help contractors and trades business owners with bookkeeping, payroll, tax strategy, tax returns and more – all year long. We’r here as a resource to help walk you through these weird new business regulations that pop up (way too often). If you find yourself looking for a new accounting firm that is aggressive about helping you save & educating you, click here to book a call.
Now, click here and file those BOI reports!
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Disclaimer: This article provides general information and should not be construed as tax, legal, or accounting advice. Always consult qualified professionals for guidance specific to your situation.