Taking on your business tax filing is our daily grind.
*insert coffee maker noise*
But there are some things that, by law, we are not permitted to file on your behalf.
Case in point: Beneficial Ownership Information (BOI for short).
We are still dedicated CPAs, however, so here’s a straightforward walkthrough of how to file this necessary–and highly important–report by yourself.
Okay, But What is BOI?
If you’re new to owning a business, this is where we introduce you to the U.S. Department of the Treasury and its Financial Crimes Enforcement Network. (We know them as FinCen.)
Do they wear crisp suites and dark sunglasses?
Maybe.
Should you be nervous about them?
Only if you’re trying to commit crimes with your money. (Please don’t.)
Beneficial Ownership Information became important in 2021, when Congress enacted the bipartisan Corporate Transparency Act to curb illicit finance. This law requires many companies doing business in the United States to report information about who ultimately owns or controls them.Yes, you may be a small business and not an international powerhouse. But the law still applies to you. So it’s really important not to skip this.
Do You Need to File?
You may need to report information about your company’s beneficial owners if it is–
1. a corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
2. a foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing.
Why Do You Need to File BOI?
Filing BOI for your business is a mandatory requirement designed to enhance transparency and combat financial crimes such as money laundering. As a beneficial owner–someone who benefits from ownership of the company–you are required to disclose your identity and the extent of your ownership in the business entity.
When Does This Affect You?
According to the U.S. Department of the Treasury, reporting your beneficial ownership information is not an annual requirement. Unless information for your company needs to be updated or corrected, you only need to submit a report once.
- If your company was created or registered before January 1, 2024, then you have until January 1, 2025 to report your BOI.
- On the other hand, if your company has been created or registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective–whichever is earlier.
- If your company is created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
Any updates or corrections to the BOI that you previously filed with FinCen must be submitted within 30 days.
How to File BOI
Now it’s time for the brass tacks. There are 4 main steps to this process:
- Collect the information you’ll need.
Before you start, make sure you have the following information on hand.
–The full name, date of birth, and address of each beneficial owner in your company.
–A description of the nature of each owner’s interest in the entity.
–Identification numbers–such as social security number, passport number, or driver’s license number–for each beneficial owner.
Now is the best time to make scans of those identification documents. You’ll need all this for the form later, and it’s much easier to grab everything before you start. We recommend the app Office Lens for turning your phone into a mobile scanner and generating PDFs.
- Access the online form.
Go to fincen.gov/boi and click the link titled “File a Report Using the BOI E-Filing system.” This will take you to a fresh page allowing you to select “Beneficial Ownership Information > Get Started.” Once inside, you can opt to prepare and submit your report online by choosing the “File Online BOIR” option.
There are also step-by-step instructions available at boiefiling.fincen.gov/help to lead you through this.
- Complete the online form.
From here, patience and thoroughness are key. You’ll need to fill in all the details requested as accurately as possible. Once you do, double-check that information for any errors. You do not want to deal with the aftermath if a name gets mis-typed or dates are out of order.
You’re also going to submit any supporting documentation required. Here’s where you use those scans from your phone to attach copies of your identification documents. Again, make sure all those documents are clear and legible before moving forward. If necessary, re-do the scans for a clearer image.
Read through the entire form one more time, carefully and methodically, and double-check that the correct documents are attached. Now you’re ready to hit “submit” on your BOIR.
- Confirm your submission.
After FinCen has processed your submission, you’ll receive the Submission Status Confirmation on the screen. Make sure you download the transcript, take a picture, or screenshot for your own personal records.If you need more resources or support on this topic, you can find detailed instructions and FAQs on FinCen’s site: www.fincen.gov.
What Happens if I Don’t File?
We understand that this process may seem daunting, but it is essential for compliance with current regulations. We certainly don’t want to see you get in trouble.
Penalties for willfully not filing are a fine of $591 a day–up to $10,000–and two years in prison, with similarly serious penalties for disclosing your beneficial ownership information without authorization.
While we can’t file the BOI for you, we are here to provide any guidance or support you might need. If you have any questions or require further clarification, please do not hesitate to contact us.
Thank you for your attention to this important matter!
-The Clasen & Schiessl CPAs Team