As a small business owner, you may have heard things about the new Corporate Transparency Act in passing.
Details are still coming out, but with it taking effect in 2024, you might be anxious to learn whether it applies to you or not, as well as what you need to do.
At CSI Accounting & Payroll, we’ve prided ourselves on staying on top of laws that affect small businesses for over 50 years. In all that time, we’ve advised thousands of small business owners.
Here’s what they’re asking about the Corporate Transparency Act:
The Corporate Transparency Act requires most small businesses to file a report to the government any time they have a change in certain information. (We’ll go into the details more in the next section.)
This law was passed for a reason. Essentially, it’s the government’s attempt to cut down on criminal business activities like:
So, why focus on small businesses? It’s because these criminal businesses don’t have employees, so it makes sense to narrow it down to smaller companies.
There are still details coming out, (including newer details on how to file) but this article will go over the information that’s currently available.
We mentioned that the Corporate Transparency Act affects most small businesses, but let’s get more specific.
Businesses that are subject to the Corporate Transparency Act must have under five million dollars in revenue or have 20 or fewer full-time employees.
However, even if they meet the requirements above, the following types of small businesses are exempt from the Corporate Transparency Act:
If you meet the requirements of the small business threshold above and don’t fall under any of the exempt categories above, then you need to file.
How often do you need to file? Any new business that starts in 2024 must file within 90 days, and ones starting in 2025 will have 30 days. Any business that existed before 2024 has until Dec 31, 2024, to file.
Will you ever have to file again? It depends. After that initial file, you only need to file again within 30 days of whenever the following information changes:
What happens if you don’t file when you need to file? The civil penalty is 500 dollars per day, and the criminal penalty is two years in prison, plus 10 thousand dollars.
Since this is a new law, there may be a lot of initial forgiveness. However, we never recommend risking facing a civil or criminal penalty.
Now for the filing process. There is too much information to relay here, so we have to link the 57-page document from FinCEN.gov about this.
If you’re feeling overwhelmed by the amount of detail it includes, you’re definitely not alone. Luckily, you don’t have to handle the filing process on your own if you don’t want to.
CSI Accounting & Payroll is offering a full reporting service for an additional fee. We already handle a variety of financial and operational tasks for our small business clients, and a lot of the same demographic is subject to this law. It just makes sense that we offer help with this, too!
Now that you know more about the Corporate Transparency Act, including what it is, who it affects, and how you can file if it applies to you, are you ready to partner with CSI to simplify the process?
To see if we can be a good fit for your business, click the button below for a free consultation:
Not ready to talk? That’s okay! First, learn more about what it’s like to work with CSI by clicking the image below: