We are thrilled to announce a well-deserved promotion for one of our valued BHCB team members!

Kimberly Stofko has been promoted to Manager. Kim joined our firm in 2021 and is a proud graduate of Stonehill College in Massachusetts.

Please join us in congratulating Kim on this outstanding achievement!

The qualified business income (QBI) deduction was a centerpiece of the Tax Cuts and Jobs Act, which went into effect in 2018. Through 2025, the write-off is available to eligible individuals.

The QBI deduction can be up to 20% of:

• QBI earned from a sole proprietorship or a single-member LLC that’s treated as a sole proprietorship for federal income tax purposes, plus,
• QBI from a pass-through business entity, meaning a partnership, an LLC that’s treated as a partnership for federal income tax purposes or an S corporation.

Pass-through businesses report their federal income tax items to their owners, who then take them into account on their owner-level returns. The QBI deduction, when allowed, is then written off at the owner level, and it can potentially be a big tax-saver.

Deduction Basics

QBI means qualified income and gains from an eligible business reduced by related deductions and losses. According to the IRS, QBI from a business is reduced by:

1. The allocable deduction for a contribution to a self-employed retirement plan,
2. The allocable deduction for 50% of your self-employment tax bill, and
3. The allocable deduction for self-employed health insurance premiums.

Income from the business of being an employee doesn’t count as QBI. The same is true of guaranteed payments received by a partner or an LLC member treated as a partner for tax purposes for services rendered to a partnership or LLC (often called partner salaries). Salary collected by an S corporation shareholder-employee does not count as QBI, nor does salary collected by a C corporation shareholder-employee.

On your Form 1040, the QBI deduction doesn’t reduce adjusted gross income (AGI). In effect, it’s treated the same as an allowable itemized deduction.

Unfortunately, the QBI deduction also doesn’t reduce your net earnings from self-employment for purposes of the self-employment tax nor does it reduce your net investment income for purposes of the 3.8% net investment income tax (NIIT) that can hit higher-income individuals.

Deduction Limitations

At higher income levels, unfavorable QBI deduction limitations come into play.

For 2025, the limitations begin to phase in when taxable income (calculated before any QBI deduction) exceeds $197,300 ($383,900 if you’re a married joint filer). For 2024, the limitations are fully phased in once taxable income exceeds $247,300 ($484,600 for married joint filers).

For 2024, the limitation thresholds were $191,950 and $383,900, respectively. For 2024, the limitations were fully phased-in once taxable income exceeded $241,950 or $483,900, respectively.

If your income exceeds the applicable phased-in number, your QBI deduction is limited to the greater of: 1) your share of 50% of W-2 wages paid to employees during the tax year and properly allocable to QBI or 2) the sum of your share of 25% of such W-2 wages plus your share of 2.5% of the unadjusted basis immediately upon acquisition (UBIA) of qualified property.

The limitation based on the UBIA of qualified property is intended to benefit capital-intensive businesses like manufacturing or hotel operations. Qualified property means depreciable tangible property (including real estate) that’s owned by a qualified business and used by that business for the production of QBI. The UBIA of qualified property generally equals its original cost when it was first put to use in your business.

Finally, your QBI deduction can’t exceed 20% of your taxable income calculated before any QBI deduction and before any net capital gain amount (net long-term capital gains in excess of net short-term capital losses plus qualified dividends).

Unfavorable Rules for Specified Service Trades or Businesses

If your operation is a specified service trade or business (SSTB), QBI deductions begin to be phased out when your taxable income (calculated before any QBI deduction) exceeds the applicable threshold. See the right-hand box for what counts as an SSTB.

For 2025, the phase-out begins when your taxable income (calculated before any QBI deduction) exceeds $197,300 ($494,600 if you’re a married joint filer). For 2025, phase-out is complete if your taxable income exceeds $247,300 ($494,600 for married joint filers).

For 2024, the phase-out begins when your taxable income exceeds $191,950 and $383,900, respectively. For 2024, phase-out is complete if your taxable income exceeds $241,950 or $483,900, respectively.

Bottom Line: If your taxable income exceeds the applicable complete phase-out number, you’re not allowed to claim any QBI deduction based on income from any SSTB.

Aggregating Businesses

Aggregating businesses can allow an individual with taxable income high enough to be affected by the limitations based on W-2 wages and the UBIA of qualified property to claim a bigger QBI deduction than if the businesses were considered separately.

For example, say you are a high-income individual who owns an interest in one business with lots of QBI but little or no W-2 wages and an interest in a second business with minimal QBI but lots of W-2 wages. Aggregating the two businesses can result in a healthy QBI deduction while keeping them separate could result in a lower deduction or maybe no deduction. However, you must pass tests set forth in IRS regulations to be allowed to aggregate businesses.

Key Point: You can’t aggregate a SSTB with any other business, including another SSTB.

Scheduled to Disappear

As the tax law reads right now, the QBI deduction is essentially a use-it-or-lose-it deal, because it’s scheduled to expire after 2025. Congress could extend it, but you shouldn’t plan on that happening. The QBI deduction rules are explained in detail in IRS regulations that are lengthy and complex.  Your tax professional can advise you on how to get the best QBI deduction results and the best overall federal tax results in your specific circumstances.

These days, many people turn to social media for news, restaurant and product reviews, and other information. However, tax advice is one thing you generally shouldn’t get through sites such as Facebook, TikTok, Instagram and X (formerly known as Twitter).

The IRS has issued repeated warnings over the past year about inaccurate advice and outright scams circulating on such platforms by people without the proper credentials. Here are some recent bogus claims that businesses and individuals have fallen for, putting them at risk of costly civil and criminal penalties, interest, and fees.

Self-Employment Tax Credits

To be clear, there’s no “self-employment tax credit” under current tax law. But that hasn’t stopped nefarious promoters from marketing it on social media as a way for self-employed people to receive large payments for losses incurred during the pandemic. Their posts wrongly suggest that many people qualify for payments of up to $32,000.

The claims stem from a more limited tax break known as the sick leave and family leave credit. This legitimate credit generally was available to self-employed people who would’ve been eligible to receive the temporarily expanded qualified sick or family leave wages if they’d worked for an employer. However, the IRS has received tax returns from taxpayers claiming the credit based on income earned as employees, not as self-employed individuals.

Moreover, the credit applies only to narrow COVID-related circumstances in 2020 and 2021. Eligible taxpayers must have had one of various technical reasons that prohibited them from working during the covered period. For example, they must have needed to care for someone subject to a quarantine or isolation order.

Misuse of Forms

The IRS has identified multiple filing season hashtags on social media and posts involving the use of legitimate tax forms for the wrong reasons. One scheme, for example, relies on Form W-2, “Wage and Tax Statement.”

The scheme encourages people to use tax software to manually complete the form with false information and then file it electronically. Scammers suggest taxpayers include large income and withholding figures, along with fake employer names, to obtain substantial refunds based on the falsified withholding amounts.

Schedule H (Form 1040), “Household Employment Taxes,” is another subject of trickery. Misleading social media posts advise people to invent fictitious household employees and use the form to claim refunds based on false sick and family medical leave wages they never paid.

Social media users also may see “wildly inaccurate claims” regarding Form 8944, “Preparer e-file Hardship Waiver Request.” For example, some posts indicate taxpayers can use it to receive refunds, even if taxpayers have balances due. However, the form is only for tax professionals who need waivers to file tax returns on paper instead of electronically. It’s not a form that the average taxpayer should use.

Fuel Tax Credit

The fuel tax credit is legitimate, but it’s available only for off-highway business and farming use, which puts it outside most taxpayers’ use. The IRS is seeing a growing number of fictitious claims for the credit on Form 4136, “Credit for Federal Tax Paid on Fuels.”

According to the IRS, unscrupulous promoters or tax return preparers mislead taxpayers about deductions for fuel use and create fake documents or receipts for fuel. They often charge high fees for filing false claims. Taxpayers should be aware that the IRS has intensified its scrutiny of fuel tax credit claims, and those claiming it improperly are at risk of compliance action by the agency.

Employee Retention Tax Credit

Perhaps the most successfully promoted misuse of a tax break has centered around the Employee Retention Tax Credit (ERTC). This refundable credit generally was intended to help employers that continued to pay their employees when they were shut down during the pandemic or suffered major drops in gross receipts in 2020 and 2021. Eligible employers could potentially qualify for $26,000 in refunds per employee.

Scammers jumped on social media to promote far-fetched schemes, charging hefty fees to help employers claim the ERTC, regardless of whether they were eligible. Many weren’t, due to the strict requirements.

The IRS received a flood of invalid claims, resulting in an almost year-long moratorium on the processing of new claims. After reviewing about 1 million filings, the IRS announced it would deny tens of thousands of erroneous claims. Its review of 2020 claims found more than 22,000 improper claims, resulting in $572 million in assessments against employers.

The good news is that the IRS is providing employers with some avenues for relief, including a withdrawal program. For a limited time (through November 22, 2024), the IRS provided a Voluntary Disclosure Program to some taxpayers. If you’re uncertain about the legitimacy of an ERTC claim your business previously filed, contact your tax advisor to assess your options.

Reach Out for Trusted Advice

The IRS regularly urges taxpayers to consult with an experienced, reputable tax professional before filing claims based on social media posts from untrusted sources. At the very least, remember that if a tax strategy seems too good to be true, it probably isn’t legitimate.

Taxes can affect your passport

Seriously delinquent tax debt (SDTD) could put your passport at risk (unless an exception applies). SDTD is a legally enforceable, unpaid federal tax assessment. In 2024, this debt must exceed $62,000, with a lien filed and other remedies exhausted. In 2025, the threshold will rise to $64,000. These debts include U.S. individual income taxes, trust fund recovery penalties, business taxes for which the taxpayer is personally liable and other civil penalties. If the IRS notifies the U.S. State Dept. that you have SDTD, your passport may be denied, revoked or limited. Click here for the details, including the conditions required to reverse a certification.

Protect your identity this tax season

The IRS’s IP PIN program, which is intended to help prevent tax identity theft, is being put to new use this tax season. In the past, the IRS rejected e-filed returns that claimed dependents already claimed on another return. The rejected returns were required to be refiled on paper. But now in 2025, taxpayers can e-file with “duplicate dependents” so long as they also provide a valid IP PIN.

You can obtain an IP PIN here. Assuming other issues that might trigger a rejection don’t exist, the IRS will accept a refiled return with an IP PIN. This change is expected to benefit filers claiming tax credits such as the Child Tax Credit.

Get a jump on your 2024 tax return

If you’d like to get an early start on your 2024 federal tax return, here’s how. You can create or access an IRS Online Account (click here) to review your historical tax records, request a personal identification number and view any new tax information. Contact us for your tax preparation appointment at your convenience. Then start gathering tax records, including relevant receipts and invoices. You’ll want to give these records to us when we prepare your return and we’ll use them to claim deductions and credits. 

As a new year of earnings begins, visit the IRS Tax Withholding Estimator (click here) to help ensure your employer is withholding the appropriate amount. You may need to submit an updated Form W-4. Contact us with any questions.

Helping someone with tuition?

It’s a new year, and for many, that means the start of another school year, complete with tuition bills. Consider the tax implications if you’re considering helping a grandchild or other student with their college expenses. If the amount you give exceeds the annual gift tax exclusion, you might owe gift tax on the excess. In 2025, this exclusion is $19,000 per recipient or $38,000 for married donors who split gifts (up from $18,000 and $36,000, respectively, in 2024). 

To avoid tax implications, you can pay tuition directly to the school, which qualifies for an unlimited gift tax exclusion. This exclusion applies only to tuition, not to room, board, books or supplies.

Beware bad tax advice on social media

Despite IRS warnings, many taxpayers continue to be duped by bad online tax advice. The tax agency and its Security Summit partners are renewing alerts about false social media claims “that promise to magically enrich taxpayers.” In particular, taxpayers are warned about claiming credits, including a nonexistent “Self Employment Tax Credit” and the Fuel Tax Credit that’s real but only applies in rare situations. Some social media scammers try to fleece taxpayers by demanding fees for their dubious advice. But many post false information online simply for views and clicks. Taxpayers are encouraged to ignore unsolicited advice and work only with trusted tax professionals.

We are deeply saddened to announce the passing of our esteemed colleague, Lawrence “Larry” Sax, at the age of 95. Larry dedicated an extraordinary 66 years of his career to Beers, Hamerman, Cohen & Burger, PC, where his professionalism, integrity, and leadership set a standard of excellence.

Larry’s distinguished career began after graduating from NYU in 1951 and earning his CPA license in Connecticut in 1954. From 1951 to 1953, he served in the U.S. Army’s Audit Agency, demonstrating his commitment to precision and accountability. A founding partner of Schwartz and Sax, CPAs in 1959, Larry’s vision and leadership guided the firm through decades of growth, evolving into Cohen, Burger, Schwartz and Sax in 1999 and ultimately becoming Beers, Hamerman, Cohen & Burger.

Larry’s dedication to the accounting profession was reflected in his 70-year membership in the Connecticut Society of CPAs, where he served on the Board of Governors for three years, as well as his nearly 70-year affiliation with the American Institute of Accountants. His contributions to the field were both enduring and impactful, leaving a legacy that will continue to guide future generations of professionals.

We extend our deepest condolences to Larry’s family and to all who had the privilege of working alongside him. His commitment to excellence and his profound impact on the firm and the profession will not be forgotten.

The Republicans will soon control the White House and both chambers of Congress, which will likely open the door for major tax legislation next year. Here are some thoughts on how this power shift could affect the taxes of small businesses and their owners.

Extension of TCJA Provisions

The Tax Cuts and Jobs Act (TCJA), which generally became effective in 2018, included many important federal income tax provisions that affect small businesses and their owners. Some are scheduled to expire at the end of 2025, while others are permanent. Republicans are expected to extend many of the expiring provisions, including:

Individual tax rates on business income.

The TCJA retained seven tax rate brackets as under pre-TCJA law, but five rates are lower than they were before. These rates generally apply to an individual taxpayer’s:

• Net taxable income from a sole proprietorship or from a limited liability company (LLC) that’s treated as a sole proprietorship for tax purposes, and
• Share of net income passed through from a partnership, an LLC that’s treated as a partnership for tax purposes or an S corporation.

For 2025, the tax rates for ordinary income are as follows:

2025 Federal Tax Rates on Ordinary Income and Short-Term Capital Gains

In 2026, the rates and bracket edges that were in place for 2017 (with cumulative inflation adjustments) are scheduled to return unless future legislation is enacted to change that outcome. When the Republicans take control of Congress in 2025, the TCJA rates for individuals will probably be extended — and the top rate will likely stay at the current 37%.

QBI deduction.

Before the TCJA, net taxable income from sole proprietorships, partnerships, LLCs that are treated as sole proprietorships or partnerships for tax purposes, and S corporations was passed through to the owners and taxed at owners’ standard federal income tax rates. The TCJA established a new deduction based on a noncorporate owner’s qualified business income (QBI) from these businesses. This tax break is available to individuals, estates and trusts.

Under current law, a deduction of up to 20% of QBI may be available. However, it’s subject to limitations that may apply at higher income levels. The QBI deduction isn’t allowed in calculating a noncorporate business owner’s adjusted gross income (AGI), but it reduces taxable income. In effect, it’s treated the same as an allowable itemized deduction, though you’re not required to itemize to benefit.

The QBI deduction is scheduled to expire after 2025, absent congressional action. However, the Republican-controlled Congress will likely extend this tax break — or they might liberalize it or make it permanent.

First-year depreciation tax breaks.

For qualified property, the TCJA initially increased the first-year bonus depreciation percentage to 100% for eligible assets. After 2022, first-year bonus depreciation is still available, but the bonus depreciation percentages are reduced as follows:

• 80% for property placed in service in calendar year 2023,
• 60% for property placed in service in calendar year 2024,
• 40% for property placed in service in calendar year 2025, and
• 20% for property placed in service in calendar year 2026.

First-year bonus depreciation is scheduled to vanish after 2026 without congressional action. However, there’s a good chance the new Congress will extend or revive it. President-Elect Donald Trump has even proposed returning to 100% first-year bonus depreciation for qualifying capital investments.

In addition, Trump has floated the idea of doubling the ceiling on the Section 179 expensing deduction for small businesses’ qualifying investments in equipment. The TCJA permanently capped the deduction at $1 million, adjusted annually for inflation ($1.22 million in 2024 and $1.25 million in 2025). The deduction is subject to a phaseout when the cost of qualifying asset additions exceeds $2.5 million, adjusted annually for inflation ($3.05 million in 2024 and $3.13 million in 2025).  

C Corporation Tax Rate

The TCJA permanently established a flat 21% corporate rate for C corporations, which also applies to personal service corporations (PSCs). Before the TCJA, C corporations paid graduated federal income tax rates of 15%, 25%, 34% and 35% on taxable income. When taxable income exceeded $10 million, the effective tax rate was a flat 35%. PSCs paid a flat 35% rate on all taxable income.

Trump campaigned to lower the corporate tax rate from 21% to 15% for corporations that make their products in America. However, it’s currently unclear whether he has congressional support for this proposal.  

R&E Expenditures

Starting in 2022, the TCJA brought a significant permanent change to the tax treatment of research and experimentation (R&E) costs under Internal Revenue Code Section 174. Under current law, businesses no longer have the option to deduct so-called “specified R&E expenses” (those paid or incurred during the tax year). Instead, they must amortize these costs over five years if incurred in the United States, or 15 years if incurred outside the country. Amortization continues even if the underlying property is disposed of, retired or abandoned during the applicable period. In addition, software development costs now must be treated as Sec. 174 expenses.

Making matters even more complicated is a provision requiring that the amortization period begin at the midpoint of the tax year in which the expenditures are incurred or paid. As a result, taxpayers can deduct only 10% of expenses in the first year and 20% of expenses in years two through five, with the remaining 10% deducted in year six.

R&E expenditures generally include research and development (R&D) costs in the experimental or laboratory sense. Applicable costs also include those incurred in efforts intended to discover information that would eliminate uncertainty about the development or improvement of a product, including salaries.

Important:

Sec. 174 defines R&E expenditures more broadly than R&D expenses are defined for Sec. 41 R&D tax credit purposes. So, costs not covered by the credit may still be considered R&E expenditures. That means Sec. 174 may apply to a business regardless of whether it claims the credit.

Before the TCJA went into effect, a business could either:

• Deduct R&E expenses in the year they were incurred, or
• Capitalize and amortize the costs over a minimum of five years.

Software development costs could be expensed immediately. They could also be amortized over five years from the date of completion or amortized over three years from the date the software was placed in service.

The new Congress may try to restore the option to deduct R&E costs. Bipartisan support exists for this change because this TCJA provision has adversely affected many small businesses.

Specifically, the provision has caused many companies — particularly those in the life sciences and technology sectors — to report taxable income, even if they incur losses. In January 2024, the House passed the Tax Relief for American Families and Workers Act (H.R. 7024) by a vote of 357-70. Among other things, the bill would have temporarily restored the previous Sec. 174 immediate expensing option through 2025 on a retroactive basis for domestic R&E expenses. The Senate never voted on the bill. It’s likely that the new Congress will revisit the issue.

Additional Tax Proposals

On the campaign trail, President-Elect Trump proposed various tax law changes that could affect employers’ payroll tax obligations if enacted. Examples include:

• Eliminating taxes on tips paid to restaurant and hospitality workers,
• Eliminating taxes on overtime pay, and
• Eliminating taxes on firefighters, police officers, active-duty military members and veterans.

However, Trump didn’t provide any details on possible rules and restrictions. If these changes are enacted, employers presumably wouldn’t have to pay federal payroll taxes on any tax-free payments.

In addition, Trump generally doesn’t support the various “green” energy tax subsidies implemented over the last few years, including the tax credit for “clean” commercial vehicles. In fact, he’s promised to dismantle the Inflation Reduction Act (IRA), including cutting unspent funds allocated for the law’s tax incentives for clean energy projects. However, Republicans from districts and states with significant clean energy projects planned or underway may push back on a full repeal of the IRA. As a compromise, Congress might propose retaining some of the IRA tax credits or restricting them through tighter eligibility requirements.

Finally, the president-elect has repeatedly pledged to impose a baseline tariff on imported goods. In his latest proposal, he stated that he would impose a 25% tariff on products from Canada and Mexico and additional tariffs on imports from China. During the campaign, he made several other proposals. Trump routinely claims that the exporting countries will bear the cost of the tariffs. However, U.S. companies that buy imported goods pay the tariffs and will likely pass them along to their customers. Some major U.S. companies and the National Retail Federation have already warned that Trump’s tariff proposals would increase product prices.

Wait and See

It’s currently unclear whether Republicans will be able to deliver on their campaign promises. But, with the looming expiration date of many TCJA provisions, 2025 is certain to be a landmark year for federal tax legislation. Contact your tax advisor to stay atop the latest developments and devise tax planning strategies for your business to optimize your tax outcome.  

In a surprising turn of events, a federal appeals court has issued another ruling that suspends a requirement for businesses to file reports about their beneficial ownership information (BOI). This came just days after the same court issued a ruling that resulted in the federal government announcing that millions of small businesses did have to file BOI reports by January 13, 2025.

The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) immediately announced: “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”

Bottom line: If your business was concerned about the deadline, or rushing to meet it, you can relax for now. Business groups, including the National Federation of Independent Business (NFIB) applauded the latest decision. In a press release, the NFIB stated that since small businesses were told that they needed to “urgently submit” BOI reports, they “have experienced enormous chaos and confusion.”

What the requirements are intended to accomplish

The BOI requirements were imposed under the Corporate Transparency Act (CTA). They’re intended to help prevent criminals from using businesses for illicit activities, such as money laundering and fraud. The CTA mandated many small businesses to provide information about their “beneficial owners” (the individuals who ultimately own or control the businesses) to FinCEN. Failure to submit a BOI report by the applicable deadline would have resulted in civil or criminal penalties, or both.

FinCEN estimated that approximately 32.6 million companies would be affected by the reporting rules in the first year.

Timeline of the requirements

To help explain the head-spinning situation, here’s a timeline of some significant events.

January 1, 2021: The Corporate Transparency Act is enacted.

January 1, 2024: BOI reporting requirements begin to take effect. Initial BOI reports for companies formed or registered prior to 2024 have one year to file reports. Those that register on or after January 1, 2024, have 90 days to file upon receipt of their creation or registration documents and those that register on or after January 1, 2025, have 30 days to file upon receipt of their creation or registration documents.

December 3, 2024: The U.S. District Court for the Eastern District of Texas enters an order suspending nationwide enforcement of the CTA and its BOI reporting requirements. The court challenges the constitutionality of the CTA. (However, in other cases, district courts have upheld the CTA and its requirements.)

December 5, 2024: The government appeals the December 3 district court ruling.

December 6, 2024: FinCEN announces in an alert: “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”

FinCEN states that it believes the CTA is constitutional.

December 23, 2024: The U.S. Court of Appeals for the Fifth Circuit again allows the nationwide enforcement of the CTA and the BOI reporting requirements. FinCEN announces in another “alert” that reporting companies formed or registered prior to 2025 have until January 13, 2025, to file a BOI report (rather than the original January 1, 2025, deadline).

December 26, 2024: The Fifth Circuit vacates the stay and reinstates a nationwide preliminary injunction enjoining (or prohibiting) the government from enforcing the CTA.

December 27, 2024: FinCEN announces in another “alert” that reporting companies aren’t currently required to file BOI reports in January. The Fifth Circuit announces a schedule to address the “weighty substantive arguments” again, beginning in February 2025.

What the future could hold

As you can see by the latest announcement from the appeals court, the ongoing saga of the BOI reporting requirements isn’t necessarily finished. In addition to the court potentially changing the rules again, there could be legislation repealing the reporting requirements when Republicans take control of Congress in the new year. Contact us if you have questions or want to file a BOI report voluntarily.

© 2024

On December 26, the Fifth Circuit Court of Appeals reinstated a lower court’s injunction that temporarily blocks the enforcement of beneficial ownership information (BOI) reporting requirements outlined in the Corporate Transparency Act (CTA) and administered by the Financial Crimes Enforcement Network (FinCEN). This decision reverses an earlier order issued by the court earlier in the week, aiming to “preserve the constitutional status quo while the merits panel reviews the parties’ substantive arguments.”

The AICPA, CTCPA, and several state CPA associations have been advocating for the federal government to delay the original BOI reporting deadline of January 1, 2025, by at least one year. While these organizations await further clarification from FinCEN, professionals assisting clients with BOI filings are encouraged to continue collecting necessary information and remain prepared to file in case the injunction is lifted.

The Financial Crimes Enforcement Network (FinCEN) has extended the deadline for filing Beneficial Ownership Information (BOI) reports to January 13, 2025. This decision follows a court ruling reinstating the reporting requirements of the Corporate Transparency Act (CTA), which were temporarily blocked earlier this month.

The extension applies to most reporting companies and allows additional time for compliance, particularly for entities affected during the injunction period. Companies formed or registered before January 1, 2024, now have until January 13, 2025, to submit their initial BOI reports.

The CTA, enacted to combat money laundering, requires companies to disclose beneficial ownership details. The decision aligns with advocacy efforts by organizations like the AICPA, which had pushed for extended deadlines to ease the transition for affected companies.

For more information, visit:

• FinCEN BOI Reporting Resource Center: https://fincen.gov/boi

This holiday season, our BHCB teams in both the New Haven and Fairfield offices came together to support the Salvation Army Angel Tree program. We’re proud to help bring joy to children and families in need by making sure they have gifts to open this Christmas.

Learn more about this wonderful initiative here: saangeltree.org